Lord Joffe

Joel Goodman Joffe, Esquire, CBE, having been created Baron Joffe, of Liddington in the County of Wiltshire, for life--Was, in his robes, introduced between the Lord Judd and the Lord Haskel, and made the solemn Affirmation.

The Lord Chancellor: Leave of Absence

Lord Irvine of Lairg: My Lords, before business begins, I take the opportunity to inform the House that I am to deliver the opening address at a British Council conference to be held in the Reichstag building in Berlin on Monday 28th February when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

Armed Forces Disciplinary System: Personnel Rights

Lord Renton: asked Her Majesty's Government:
	What steps they propose to take to cover the situation which might arise if members of the Armed Forces exercise their rights under the Human Rights Act 1998 in ways which conflict with service discipline.

Baroness Symons of Vernham Dean: My Lords, we recognise the importance of maintaining a sound system of discipline in the Armed Forces. The Armed Forces Discipline Bill includes measures to ensure that service personnel rights under Articles 5 and 6 of the European Convention on Human Rights are maintained in a way consistent with service discipline.

Lord Renton: My Lords, while thanking the noble Baroness for her attempt to answer the Question, perhaps I may remind her that when there is a conflict between any two branches of our statute law, it can only be resolved in our democracy by an Act of Parliament. It cannot be resolved, as she suggested, while the Armed Forces Discipline Bill is going through your Lordships' House, by advice from the Minister.

Baroness Symons of Vernham Dean: My Lords, I know that the noble Lord, Lord Renton, was consistent and assiduous in pursuing this point during the passage of the Bill through your Lordships' House. In introducing the Bill into the House I signed a certificate, which I did on advice, that nothing in the Bill was in conflict with the European convention. My honourable and right honourable friends in another place signed a similar certificate in introducing the Bill into another place. I remind the noble Lord that very often rights in the European convention are not absolute rights. I remind him that Article 11 says:
	"This Article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the armed forces, of the police or of the administration of the State".
	So I think the noble Lord will find that there is not the absolute conflict which he fears may be the case. That is indeed my opinion and the opinion of my right honourable and honourable friends.

Lord Craig of Radley: My Lords, in the Armed Forces Discipline Bill the Government seek to ensure that the authority of the commanding officer is not undermined by the Human Rights Act 1998. Do Her Majesty's Government agree that there may be occasions when the interests of the service must take precedence over the individual human rights of the serviceman or woman? Will the Government undertake to defend any commanding officer who applies the provisions of the Armed Forces discipline Acts--for example, in the case of disobedience to a lawful command--against any charge brought against him by an individual in his unit under the Human Rights Act?

Baroness Symons of Vernham Dean: My Lords, there is nothing in the Human Rights Act or in the Bill currently under discussion in another place which prevents proceedings being taken for offences. When we discussed this matter in your Lordships' House I said that operational considerations would remain paramount. There should not be any misunderstanding on this point. The Government, like any other responsible government, will expect commanders to give appropriate priority to the operational imperatives of the situation and, of course, to the lives and security of those under their command. I do not believe that there is any conflict between that unwavering intention and the procedures set out in the Bill which your Lordships have discussed and which is currently in another place.

Earl Ferrers: My Lords, the noble Baroness said that she would expect a commander to give operational--I forget the words that she used. But her answer was far from clear. The noble and gallant Lord asked whether Her Majesty's Government would ensure that the Human Rights Act did not take precedence over the commander's decision. The noble Baroness's answer was not clear.

Baroness Symons of Vernham Dean: My Lords, I am very sorry. I shall try again. Operational considerations will be paramount. That is an unequivocal statement. I said that I did not believe there should be any misunderstanding on the point. We debated this matter fully in your Lordships' House when we were dealing with the Armed Forces Discipline Bill and I would not want to be misunderstood in any way on it. If I am being asked for an assurance that in some operational circumstances the requirements of the Bill may be set on one side, I cannot offer your Lordships that assurance. There is no operational "opt out", if I may put it that way, which was the point on which the noble Lord, Lord Burnham, pressed me very assiduously when we were discussing the Bill. The important point is that we have a single system here which is capable of operating in all circumstances. As I said, in all circumstances it is operational effectiveness--it is the commanding officer's duty to ensure that appropriate priority is given to the lives and security of those under his command--which must take priority.

Lord Elton: My Lords, in substance, the noble and gallant Lord asked the Minister whether the Government would defend commanding officers who were sued by junior members of the forces over orders that they had given. The noble Baroness's reply in substance, as I understood it, was that the Government could see no circumstances under which such a case would be brought. Were those circumstances unexpectedly to arise, could the noble and gallant Lord expect such officers to receive such governmental support?

Baroness Symons of Vernham Dean: My Lords, I cannot think of every possible exigency that might occur where the commanding officer's word was challenged. If I may say so, the noble Lord is asking me to gaze into the future in a way that is a little difficult for me to do. I have said that operational effectiveness is the crucial issue and, of course, where the commanding officer's discipline was being exercised in pursuit of that operational effectiveness, we would usually--most often--expect to be able to support the commanding officer. But I cannot say that on every single occasion we would always know that the commanding officer had been right. That really would be taking it a little too far. However, I hope that I have given a reasonably reassuring response to the noble Lord, Lord Elton, and to the noble and gallant Lord, Lord Craig.

Lord Chalfont: My Lords, does the noble Baroness agree that this is not entirely a matter of operational requirements but of a possible conflict between the authority of a commanding officer and the rights of a soldier or a junior under the Human Rights Act? The noble and gallant Lord's question is a very simple one. The noble Baroness ought to be able to look into the future to that extent. If the authority of a commanding officer is challenged under the Human Rights Act, will the authority of the commanding officer be upheld, or not?

Baroness Symons of Vernham Dean: My Lords, that is precisely why we dealt with the Bill in the way that we did--because such an issue would be a matter for the courts. The noble and gallant Lord asked me about the exercise of a commanding officer's disciplinary authority. What I have said is that, where that disciplinary authority, properly exercised, is in pursuit of operational effectiveness, we should expect that. The noble Lord, Lord Chalfont, is asking me to pre-judge possible decisions that a court might take.

Lord Burnham: My Lords, will it be a breach of the Human Rights Act or of the service discipline Acts if the Army refuses to kiss the IRA, as recommended by the Government?

Baroness Symons of Vernham Dean: My Lords, my noble friends are urging me that that question was somewhat wide of the mark. However, I am rather grateful to the noble Lord. He has raised a matter that appeared in the newspapers today and I am grateful for the opportunity to be able to say to him that we do not accept that there is any equivalence--that is an issue that has been raised--between legally held military weapons on the one hand and illegally held terrorist weapons on the other. Our position is that any reductions that we may make in our military presence in Northern Ireland should be justified purely in terms of the security situation. That is the kind of thing that I believe the House wants to hear, not the rather provocative phrasing of the noble Lord's question.

Democratic Republic of Congo

The Earl of Sandwich: asked Her Majesty's Government:
	What they are doing to help African governments end the conflict in the Democratic Republic of Congo.

Baroness Ramsay of Cartvale: My Lords, our interest is in a peaceful, democratic and prosperous Congo. That is why we have worked closely with our African, United Nations and European Union partners since the start of the conflict to urge all parties to reach a negotiated settlement. We strongly support the Lusaka agreement. It is Africa's agreement, and provides the right formula for peace in the Congo and the region. Our aim is now to help implement the agreement and to keep the DRC at the top of the international community's agenda.

The Earl of Sandwich: My Lords, I thank the noble Baroness for that positive reply. Indeed, we should all be grateful for what the Foreign Office is trying to do in that part of Africa, considering that there are nearly a million displaced people in the Congo who are suffering every day. However, will the Government give more consideration to the size of the peacekeeping force that is to be sent to the region and to the international response following the recent discussion in the Security Council? Given the size and importance of the Congo, how can a small force of that size possibly meet its commitments under the Lusaka agreement? Will the Government encourage the United Nations to believe that the situation in Africa is very serious and that it must be addressed today?

Baroness Ramsay of Cartvale: My Lords, the noble Earl has raised a variety of points. I assure the House that we support the phased approach recommended by the UN Secretary-General. As the noble Earl said, there was a proposal for a peacekeeping force of 5,500. That phased approach will allow the Secretary-General to decide whether the necessary climate of security, co-operation and access exists in each area before UN troops and observers are deployed. We are ready to consider a third phase of the UN mission--a full UN peacekeeping operation--as soon as conditions allow. I believe that the noble Earl and everyone else understands that one has to move with some caution into areas such as this before committing larger groups of troops.

Baroness Williams of Crosby: My Lords is the noble Baroness aware of the chilling remark made last week by the United States Ambassador to the United Nations, Mr Richard Holbrooke, in testimony to Congress? He said:
	"there is a high probability--in fact a near certainty--of a catastrophic political and humanitarian disaster in central Africa".
	Will the noble Baroness tell the House whether the United Kingdom Government can bring pressure to bear on Zimbabwe or Uganda, through the Commonwealth Secretariat or in other ways, to withdraw their troops from that dangerous situation?

Baroness Ramsay of Cartvale: My Lords, the noble Baroness is absolutely right about the seriousness and severity of the situation. The UK is providing political and practical support for the peace process in every way that we can. We are providing people and money to implement the military aspects. Six British military liaison officers have been deployed: four in Kinshasa, one in Lusaka and one in Harare. We have given £150,000 to help get the joint military commission up and running, and the quotation given by the noble Baroness shows the absolute priority that must be given to that. We are trying to do all that we can to encourage all the parties concerned to move on that and to take it seriously.

Baroness Whitaker: My Lords, is my noble friend aware that the majority of victims of this war, like those of other wars, are likely to be non-combatants and that a large number of them will be women and children? What is being done to ensure that they are supplied with food and clean water?

Baroness Ramsay of Cartvale: My Lords, my noble friend is right. In such situations it is often the civilians who suffer most. Since the current conflict began, in August 1998, the UK has committed £1.7 million in humanitarian assistance. I assure my noble friend that the organisations with which we work have to identify the beneficiaries of any project supported by the UK to ensure that the resources are targeted at civilians who are most in need. My noble friend asked specifically about food and clean water. Perhaps I may give a few examples. We have given £250,000 to Christian Aid for emergency food aid; for emergency water supplies and sanitation, we have given £320,000 to CARE and Oxfam, and £56,600 to the British Red Cross.

Lord Mayhew of Twysden: My Lords, with the Rwandan army now established in the eastern part of the country, is there not a high risk that the Tutsi/non-Tutsi conflict, which had such hideous consequences in Rwanda in 1996, will spread for the first time to the DRC? Do Her Majesty's Government reckon that we have a proper and a practical interest in international efforts to forestall that, perhaps by urging the Rwandans to withdraw their army?

Baroness Ramsay of Cartvale: My Lords, the noble and learned Lord again emphasises the imperative to keep up the pressure to move on this question. Our priority in Africa is to build peace and to prevent conflict. Different situations call for different responses. In Africa, that means supporting peaceful African solutions to African problems. We shall continue to play an active and constructive role in the implementation process and to work in the Security Council to support the resolution of conflicts. In the DRC, that means sustaining the Lusaka agreement.

Lord Hughes of Woodside: My Lords, does my noble friend hear a tragic echo of Angola in what is happening in the DRC? Does she recollect that, despite umpteen UN resolutions, umpteen missions, fine words, and, in the case of Angola, appeals to implement the Lusaka protocols, all efforts failed because of a lack of will? Unless there is the will to deal with the situation, we shall go through the same tragedy again and again. Will my noble friend make sure that the will is provided, as well as the physical resources?

Baroness Ramsay of Cartvale: My Lords, I assure my noble friend and the House that we shall try to ensure that this matter remains high on the agenda of the international community and that we play our part in both resources and effort to achieve some kind of peace.

UK Membership of European Union

Lord Watson of Richmond: asked Her Majesty's Government:
	Whether they view United Kingdom membership of the North American Free Trade Agreement as in any way a viable alternative to United Kingdom membership of the European Union and whether they have made any investigation of such a possibility.

Lord McIntosh of Haringey: My Lords, we do not view UK membership of the North American Free Trade Association as a viable alternative to membership of the European Union. The United Kingdom is a committed member of the EU and reaps substantial benefit from that membership. The UK has no intention now or in the future of applying to be admitted to NAFTA.

Lord Watson of Richmond: My Lords, I am grateful to the noble Lord for that reply. Given the fact that less than 15 per cent of our trade is with NAFTA and rather more than 55 per cent with the European Union, and that joining NAFTA would mean leaving the EU, does the noble Lord agree that the present quixotic enthusiasm of the Conservative leadership in another place for talks with members of the Republican Party to that end is, at the very best, an example of the unelectable in pursuit of the undesirable? What will Her Majesty's Government do to ensure that people understand the absurdity of this notion?

Lord McIntosh of Haringey: My Lords, my figures relating to trade are very close to those of the noble Lord. As to the second part of the noble Lord's question, that is a matter for the Conservative Front Bench. However, I am encouraged to read in this morning's newspapers that Mr Hague has reaffirmed that it is not the intention of the Conservative Party to withdraw from the European Union. If he can get that message across to his colleagues, we shall all benefit.

Lord Lamont of Lerwick: My Lords, be that as it may, why is it that, according to this year's WTO report, while between 1990 and 1998 the EU's percentage of world trade fell by 8 per cent, NAFTA's increased by 13 per cent; and how is it that that has been achieved without asking for billions of pounds of contributions from national governments or the employment of a single bureaucrat?

Lord McIntosh of Haringey: My Lords, as to the noble Lord's first point, it is not "be that as it may" but "be that as it is". I recorded what I understood to be a speech made today by the Leader of the Opposition. As to world trade, the noble Lord is right. In particular, the context of world trade between first world countries and the rest of the world is absolutely critical. That is why those who urge that we should become closer to, or even members of, NAFTA on the grounds that free trade between that organisation and the European Union is particularly valuable are so wrong.

Sex Education

Lord Randall of St Budeaux: asked Her Majesty's Government:
	What plans they have to introduce new guidelines to discourage the promotion of homosexuality to young children.

Baroness Blackstone: My Lords, my right honourable friend the Secretary of State for Education and Employment has made clear that the new guidance to schools on sex and relationships education will stress that it is not the job of teachers to promote sexual orientation but to help pupils to understand human sexuality and to respect themselves and others. The guidance will be firmly rooted in the law which already specifically requires schools to provide sex education with due regard to moral considerations and the value of family life. It will also be set in the context of the national framework for personal, social and health education which includes teaching about the nature and importance of marriage for family life and bringing up children.

Lord Randall of St Budeaux: My Lords, I thank my noble friend for a very helpful and constructive Answer. Is she aware that, especially over the past two weeks, I have been consulting both professionals and lay people and that there is serious concern and confusion in the community, as well as a lack of confidence in the stance of the Government, over the promotion of homosexuality? Does my noble friend agree that before drawing up any guidelines the Government should carefully define and consider in detail the balance between the role of parents and the role of the state in sex education?

Baroness Blackstone: My Lords, I was not aware that my noble friend had undertaken extensive consultations. However, I am interested to hear that he has done so and I am happy to know more about the outcome. I do not believe that anyone has grounds to lack confidence in what the Government are doing in this area. The Government take the issue extremely seriously and are themselves involved in extensive consultations with all the interested parties. One aspect that the Government need to look at is the respective roles of parents and teachers in this sensitive area.

Baroness Young: My Lords, while wishing to read very carefully what the noble Baroness said in her initial response to the Question--I found it somewhat difficult to follow the argument--I ask her whether she will clarify the point raised by the noble Lord about the Government's attitude to the promotion of homosexuality in schools. If there are to be guidelines, will they appear on the face of either the Local Government Bill or possibly the Learning and Skills Bill?

Baroness Blackstone: My Lords, as to the second part of the noble Baroness's question, currently the Government are considering whether they should have a statutory duty to provide such guidelines. I hope that the Government will reach a conclusion on that matter fairly soon. As to the first part of the question, perhaps I should re-read what I said since the noble Baroness did not pick it up. My right honourable friend the Secretary of State has made clear that the new guidance to schools in this area will stress that it is not the job of teachers to promote sexual orientation but to help pupils to understand human sexuality and to respect themselves and others.

Baroness Massey of Darwen: My Lords, can my noble friend tell the House whether the Secretary of State's guidelines will make clear that schools must consult parents about their policies and programmes for sex education in schools?

Baroness Blackstone: My Lords, any guidance will make clear that schools should consult parents on their policies and programmes for sex and relationships education. It will also make clear that they should not use materials which are inappropriate to the age and maturity of pupils. This area of education is already the responsibility of governing bodies, which are themselves required to consult parents about it.

The Lord Bishop of Blackburn: My Lords, can the Minister confirm the very positive discussions on this issue that the Secretary of State is holding with the Churches and the good progress that is being made to find a suitable framework for sex and personal relationship education in schools?

Baroness Blackstone: My Lords, I can confirm that discussions have begun and are ongoing. The Government are enormously grateful to the Churches for the time and effort that they put into consideration of this difficult and sensitive area. The Government have consulted Church and faith groups, including the Jewish and Muslim communities, and will continue to do so until they formally issue guidance for consultation with the schools sector and beyond.

Lord Williams of Mostyn: My Lords, I do not believe that the Liberals have had a chance for a while.

Viscount Falkland: My Lords, does the noble Baroness accept that, without criticising the phrasing of the Question, many of us who are parents and grandparents take a more positive view than that which is contained in it; in other words, we are much more concerned about guidelines to explain and give young children an understanding of homosexuality than guidelines to discourage the promotion of homosexuality to young children?

Baroness Blackstone: My Lords, I accept that one aspect of sex education should be to help young people understand sexuality in all its ramifications and to ensure that they learn to be tolerant and to behave in a tolerant manner.

Lord Campbell of Alloway: My Lords, may I ask--

Lord Williams of Mostyn: My Lords, I think that it is the turn of the Cross Benches.

The Earl of Listowel: My Lords, will the Government consider giving an early opportunity to debate in this House the issue of sex education?

Baroness Blackstone: My Lords, that is a matter for the business managers and the usual channels.

Lord Campbell of Alloway: My Lords, it must be this side's turn now!

Lord Williams of Mostyn: My Lords, it is definitely the turn of the noble Lord, Lord Campbell.

Lord Campbell of Alloway: My Lords, I am obliged. Will these guidelines be available by Report stage; and will the work the Government are doing with the Church be visible in the concrete form of amendments, or some provision?

Baroness Blackstone: My Lords, I am always delighted to respond to questions from the noble Lord, Lord Campbell of Alloway. Unfortunately I cannot be helpful to him because I do not know the answer. Discussions are continuing and will continue. They are being pursued as a matter of urgency. However, I cannot say whether the work will be completed by the Report stage of either the Local Government Bill--it will be quite soon--or the Learning and Skills Bill. As soon as the guidance is available for consultation I shall be happy to ensure that the noble Lord has a copy of it.

Lord Taylor of Gryfe: My Lords, is the Minister aware--

Noble Lords: My Lords--

Lord Williams of Mostyn: My Lords, the noble Lord, Lord Taylor, has been very patient.

Lord Taylor of Gryfe: My Lords, is the Minister aware that a somewhat confusing picture is emerging in Scotland in relation to this matter? Following the vote in this House, the Scottish Parliament decided that Section 28 should be withdrawn. That is complicated enough. It is a properly devolved subject. However, several local authorities in Scotland have now made decisions by majority vote to retain Section 28. So it depends where one lives in Scotland as to which provision applies.
	I am encouraged by the discussions taking place in England to resolve the problem with guidance. Could that wisdom and those sensible discussions be shared with our Scottish friends to achieve some degree of uniformity and understanding in Scotland?

Baroness Blackstone: My Lords, the Scots are a law unto themselves on this matter. However, I am sure that my right honourable friend the Secretary of State would be happy to have discussions with his opposite number in Scotland. I am aware that the Scottish Executive has issued guidance on sex education. It is not statutory guidance because the curriculum in Scotland is not subject to statutory guidance. But guidance has been issued.

Suspension of Hospital Medical Practitioners Bill [H.L.]

Baroness Knight of Collingtree: My Lords, I beg to introduce a Bill to make provision for new procedures for the suspension of hospital medical practitioners. I beg to move that the Bill be now read a first time.
	Moved, that the Bill be now read a first time.--(Baroness Knight of Collingtree.)
	On Question, Bill read a first time, and to be printed.

Alliance & Leicester Group Treasury plc (Transfer) Bill [H.L.]

Lord Boston of Faversham: My Lords, I beg to move that this Bill be now read a second time.
	Moved, That the Bill be now read a second time.--(The Chairman of Committees.)
	On Question, Bill read a second time, and referred to the Examiners.

Colchester Borough Council Bill [H.L.]

Lord Boston of Faversham: My Lords, I beg to move that this Bill be now read a second time.
	Moved, That the Bill be now read a second time.--(The Chairman of Committees.)
	On Question, Bill read a second time, and committed to a Select Committee.

Business

Lord Carter: My Lords, it may be for the convenience of the House if I explain the procedure for dealing with the three GLA orders today. It has been agreed among the usual channels that the second of today's affirmative orders and the Prayer against the election rules will be debated together this afternoon, and that includes the amendment in the name of the noble Lord, Lord Mackay of Ardbrecknish.
	The procedure will be as follows. The debate on the disqualification order will take place first, and the Motion to approve it will be moved and dealt with, it is to be hoped, quite quickly.
	The joint debate on the remaining two orders will then begin. My noble friend Lord Whitty will move his Motion that the election expenses order be agreed to. In his speech he will deal with the election expenses order and the election rules order. The noble Lord, Lord Mackay of Ardbrecknish, will then move his amendment to the first order and speak also to his second Motion on the election rules.
	The joint debate on both instruments will then take place. Any noble Lord who wishes to speak on either Motion should do so at that point. At the end of the debate the amendment to the order will be dealt with first. The Question will then be put on the election expenses order. Finally, and without further debate, the Question will be put on the Prayer against the election rules.

Greater London Authority (Disqualification) Order 2000

Lord Whitty: rose to move, That the draft order laid before the House on 3rd February be approved [9th Report from the Joint Committee].

Lord Whitty: My Lords, the first of the Motions standing in my name on the Order Paper is the one that my noble friend the Chief Whip suggested might be over quite rapidly.
	In the White Paper A Mayor and Assembly for London, the Government indicated that people who held public offices would be required to resign from them if they decided to stand for election as either mayor or to the assembly. We have decided, on reflection, that a less comprehensive approach, keeping disqualification to a minimum, is the right one to follow.
	The Greater London Authority Act 1999, and other existing legislation, disqualifies certain categories of people, such as members of the authority's staff, from being elected or being the mayor or an assembly member. The 1999 Act also establishes tailor-made disqualification regimes for the new police and fire authorities, Transport for London, and the London Development Agency. Under Section 21(1)(b) of the 1999 Act, the Secretary of State may by order designate offices and appointments which disqualify the holders from being elected or being the mayor of London or a member of the London assembly.
	The draft Greater London Authority (Disqualification) Order is now before the House. The order has been considered and approved by the other place. The purpose of the order is to set out clearly those offices and appointments which are not compatible with the roles of mayor of London or a member of the London assembly. In my opinion, the order is compatible with the European Convention on Human rights.
	Part I of the schedule to the order lists those eight bodies all of whose members are disqualified. Part II of the schedule lists a further 18 offices and appointments, the holders of which cannot be the mayor or an assembly member.
	The disqualification arrangements for the Greater London Authority need to be tailored to its circumstances--to the role and functions of the mayor and assembly members and to the inclusive approach the authority is intended to embody in London. Our aim has been to strike the right balance between preventing conflicts of interest and restricting the democratic right to stand for election of the fewest possible people.
	The GLA will be a strategic authority. It will have a relatively small range of specific functions, all of which are vital to the well-being of the capital. The mayor will also need to provide leadership for London, and to work in partnership with other organisations. We want the jobs of mayor and assembly member to be open to a wide range of talented people and to promote an inclusive approach and co-operation and partnership--and perhaps some untalented people as well! We are therefore keeping to a minimum those offices and appointments which a person will not be able to combine with being the mayor or an assembly member. We want to prevent significant conflicts of interest, but do not believe that we should rule out in legislation overlapping, complementary interests.
	We believe that serious conflicts of interest with the role of mayor or assembly member could arise with offices and appointments whose holders are required to be, or to be seen to be, politically impartial--such as judges or civil servants; or who are with a body which has a scrutiny role over the GLA or one of the four functional bodies--such as Her Majesty's Chief Inspector of Constabulary or the Police Complaints Authority; or who may exercise a quasi-judicial role over the GLA or a functional body--such as a person who hears appeals on penalty fares issued on behalf of Transport for London, a subject which is dear to many of your Lordships' hearts.
	Offices and appointments which meet these criteria are listed in the order. The order also clarifies that magistrate members of the new police authority are not eligible to stand for election as mayor or an assembly member. People who currently hold posts or employment which are disqualified in primary legislation or under this order will be required to resign before they give consent to their candidature as part of the formal nomination procedure, under the rules which will apply to the conduct of the GLA elections.
	The disqualification arrangements set out in this order will be augmented by statutory guidance on ethical standards to which the GLA will be required to have regard. This guidance which we shall publish shortly will cover conflicts (whether of interest or of time pressures) with other public offices. I believe that this is a sensible fulfilment of our requirements under the Act. I beg to move.
	Moved, That the draft order laid before the House on 3rd February be approved [9th Report from the Joint Committee].--(Lord Whitty.)

On Question, Motion agreed to.

Greater London Authority (Election Expenses) Order 2000

Lord Whitty: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
	I hope that this one will be conducted with equal despatch! This order prescribes the maximum amounts of election expenses of candidates and their agents, and third parties, in elections for the mayor of London and the London Assembly. In my opinion, the draft order is compatible with the European Convention on Human Rights.
	The draft order sets out three separate limits; for mayoral candidates, Assembly constituency candidates, and for parties and independent candidates contesting the London-wide list, reflecting the unique voting system that we have in the GLA. These limits are: £420,000 per mayoral candidate; £35,000 per candidate contesting an Assembly constituency; £330,000 per party or independent candidate contesting the London-wide list.
	These orders were the subject of substantial consultation with the political parties in December. We listened carefully to the points that they raised about the level of the limits and significantly reduced our original proposals for the mayor and the London-wide list from the levels that we had originally proposed, which were £990,000 and £495,000 respectively. That was because the consultees in other parties considered them to be too high and likely significantly to disadvantage smaller parties in particular. The new limits provide for a more level playing field for candidates, while at the same time allowing candidates and their parties the freedom to put their message across to the electorate.
	The limits can be broadly compared to expenses limits in other relevant regimes. The expense limit for mayoral candidates and parties contesting the London-wide list are broadly derived from the figure of £30,000 per parliamentary constituency used in the Political Parties, Elections and Referendums Bill as the building block for calculating the national spending limits which we are proposing for political parties. The Assembly constituency limit is broadly equivalent to the sum of parliamentary constituency limits within an Assembly constituency area. Those limits are enough to enable parties and candidates to fight effective campaigns at either the London-wide or constituency level, while at the same time not allowing their spending to become unacceptably high.
	When the order comes into force, GLA candidates and parties contesting the London-wide list will not be permitted to spend more than the relevant prescribed limit in respect of their election expenses. Election expenses are defined in the Representation of the People Act 1983 as,
	"whether before, during or after an election, on account of or in respect of the conduct and management of the election".
	Spending before 14th December 1999, the date when the relevant provisions in the GLA Act were commenced, is not caught by the provisions of the Representation of the People Act and hence would not, in our view, count towards the limit.
	Article 2 of this order prescribes the maximum expenditure which a person other than a candidate or his agent, that is a third party, may incur at such elections. Those limits are: £25,000 per third party supporting or opposing mayoral candidates; £25,000 per third party supporting or opposing London-wide list candidates, including independents; and £1,800 per third party supporting or opposing an Assembly constituency candidate. These limits are derived from the formula that we intend to bring forward by amendment to the Political Parties, Elections and Referendums Bill to limit third party spending in local elections.
	During the debate on this draft order, the other place expressed concern that these limits were high. I recognise that they are indeed high compared to the current limit of £5 set out in the Representation of the People Act 1983, but I believe that they are justified both in the light of the Bowman judgment in the European Court of Human Rights, in which the court ruled that the £5 limit constituted an unjustifiable restriction on freedom of expression, and to ensure that third parties are able to put their case across to the electorate. They are the main points of this order.
	Because of the procedure outlined by my noble friend the Chief Whip, I need also to refer briefly to the election rules which are referred to in the Prayer of the noble Lord, Lord Mackay of Ardbrecknish. Those rules, which are under the negative procedure, deal with the nuts and bolts of the election, such as the time by which nominations have to be submitted, how the public know when and where they can vote, how the polling station functions, and how the counting of votes is organised. If there are no rules, the elections cannot go ahead. I make that point in view of extraneous comment outside this Chamber. Except where necessary--for example, to provide for new voting systems in London--they follow exactly the patterns which have been set by all election rules made in the past 50 years.
	As with the order, we have consulted with the political parties in producing these rules and with those who are professionally involved in running elections, and we took account of the views received in those consultations before we laid these rules before Parliament. The rules, therefore, are not controversial. Representatives of all parties have been consulted and have raised no objection to them. I trust that the noble Lord, Lord Mackay, and others who may speak in this debate will bear that in mind.
	I need to say one other thing. This is a straightforward proposal under provisions in the GLA Act. This order and the election rules follow the normal procedure in drawing up the election rules and expenses rules under the legislation in local authority elections. I had my lunch interrupted on Sunday and my breakfast interrupted today by the dulcet tones of the noble Lord, Lord Mackay of Ardbrecknish, who indicated, slightly to my astonishment, that the Opposition intended to move against this order and these rules. In addition, I have had an indication that the Liberal Democrat Party might also be tempted to support this move, not on the ground of anything contained in these orders--as I have said, these have already been agreed by the parties--but on the ground of an entirely extraneous matter that is not and could not be contained in these orders. I therefore suggest that, as we move to the joint debate for which my noble friend the Chief Whip has indicated the procedure, we should bear in mind that any vote that is taken today will not be a vote on what has been put before this House, it having been passed in another place; it will be on something quite different. Before deciding whether and how to vote tonight, your Lordships should bear that in mind. I commend the Motion to the House.
	Moved, That the draft order laid before the House on 3rd February be approved [10th Report from the Joint Committee]--(Lord Whitty.)

Lord Mackay of Ardbrecknish: rose to move, as an amendment to the above Motion, to leave out all the words after "That" and insert "this House declines to approve the draft order laid before it on 3rd February and calls on Her Majesty's Government to lay an order which provides that candidates are allowed one freepost delivery per household".

Lord Mackay of Ardbrecknish: My Lords, as the noble Lord, Lord Whitty, has just explained, these orders for the London mayoral election and the GLA elections lay down rules which are largely based on our parliamentary rules for elections in Westminster and Europe, the Assembly elections that have been conducted recently in Wales and Northern Ireland and, of course, the Scottish parliamentary elections, where the top up member system to be used in the London Assembly was also used.
	One important aspect is missing. It is an important aspect which, as the noble Lord, Lord Whitty, has pointed out, has led me to move this amendment and the Prayer and which has led the Liberal Democrats to say that they are absolutely with me on this issue. Unlike all the election candidates for the elections that I have mentioned--the House of Commons, the European Parliament, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly--the London candidates will have no access to freepost. Candidates will not be able to send an election address to each elector, or even to each household. A much more important point is that each elector will not receive through the post a communication from the candidates informing them of the election and informing them of the candidates who are seeking the support of the voters.
	We heard last week from the Minister, Keith Hill, in the other place and from the noble Lord, Lord Bassam of Brighton, in your Lordships' House why the Government had decided not to make the freepost delivery available. Rather briefly, we have also heard an argument from the noble Lord, Lord Whitty, today.
	We have to go back to the arguments we heard in your Lordships' House last week from the noble Lord, Lord Bassam of Brighton. They were also deployed by Mr Keith Hill when moving these two orders in the other place. First, we are told that it is too late to raise the issue; that it should have been raised during the passage of the Bill and it was not. That statement is wrong. The issue was raised in the Standing Committee in the other place on 28th January 1999. The Minister's uninformative response was:
	"The right honourable gentleman raised a different issue on whether a free mail shot should apply, as in parliamentary elections, or whether it should not, as in local government elections. Perhaps he has raised one more issue".
	And that was that! We might have a debate about the meaning of that answer or non-answer, but the idea that the issue was not raised is not true.
	Equally, freepost was not an issue during the passage of the Scotland Bill or the Government of Wales Bill. And after those Bills became Acts, no one suggested that just because the issue was not raised during their passage through Parliament no freepost should be given in Scotland and Wales. So that point is entirely bogus.
	Then we have the principal point; the local government argument. The argument is that these are local elections and we do not have a post at local elections. I looked back at what the noble Baroness, Lady Hayman, said when as Minister she introduced the Greater London Authority White Paper on 25th March 1998. To be fair, she started by saying:
	"Today we are publishing our detailed proposals for a radical new type of local government".
	But then she went on to say:
	"The new authority will have new powers devolved from central government ... This is another step in our programme of constitutional reform. We are establishing new devolved assemblies in Scotland and Wales"--
	a read-across to Scotland and Wales--
	"We are now taking a significant step in decentralising government by establishing these new arrangements in London ... The mayor of London will be a powerful figure, with an electorate of over 5 million voters--more than any other individual politician in this country ... [He] will control a large budget--currently more than £3 billion".--[Official Report, 25/3/98; col. 1278.]
	That is what the noble Baroness said. Your Lordships will notice that the budget was £3 billion and not the £30 million mentioned by the noble Lord, Lord Bassam of Brighton, last Monday.
	I now draw your Lordships' attention to the words of the Deputy Prime Minister, which are to be found in Commons Hansard on 14th December 1998. He said--and he must have been reading it out because the English is quite good--
	"The proposed authority is not similar to any local government authority as we know it. It will be a new type of city government, with a city executive and elected mayor ... Therefore, it is fair to say that it is not the normal local government structure".--[Official Report, Commons, 14/12/98; col. 624.]
	Exactly, my Lords! London already has local government and local government elections in its 33 boroughs. They will continue. The London-wide elections are for a new form of government, not "local" as we have traditionally known them.
	As we have traditionally known council elections, there is no freepost, but equally there is no deposit. However, your Lordships will find that under these orders and the Greater London Authority election rules, there are deposits in these London elections. So they are not as local as the Government are trying to make out. The deposits are £10,000 for the mayoral candidates; £1,000 for a first-past-the-post candidates; and £5,000 for each top-up party. Deposits are what we have in Westminster, in the European elections and in the elections in Scotland, Wales and Northern Ireland; and with deposits goes a freepost. The Government cannot have it both ways.
	Of course, there is a huge electorate in London; bigger than any other in the country. Five million people will elect one person. Nothing--nothing--comes within the same league as such an electorate and election.
	One thing surprised me. At the end of last week the Home Office announced the pilot schemes. Noble Lords who have been following the Representation of the People Bill will know that there are to be pilot schemes of various kinds to try out ways to increase turn-out at local elections this coming May. Local authorities have put in bids for them. One local authority which has put in a bid, and had it accepted, is Watford, and the experiment in Watford is a freepost facility.
	It goes further than that because if it were a success, under the Representation of the People Bill the Government would have the power to roll out the same freepost facilities to local governments throughout the country and by secondary legislation.

Lord Whitty: Will not the noble Lord accept that the Watford experiment, if such it be, is possible only under the provisions of the Bill which is still before the House? The noble Lord is asking us to produce secondary legislation for which we have no primary power. Not only could it not be under the powers under which these orders are proposed, but there are no primary powers for us to introduce a freepost. That is the point that I am making and it is the point which the House must seriously consider in making a judgment on the noble Lord's Motion.

Lord Mackay of Ardbrecknish: My Lords, if that is the case, I am surprised that the noble Lord, Lord Whitty, did not make the point in his introductory speech. But even if it is the case, I offer the noble Lord a vehicle. The Representation of the People Bill has its Report stage next Tuesday. Last week, we debated an amendment and we and the Liberal Democrats used it as a means of putting down a marker that we were serious about the issue and the Government could do something about it in that Bill. If they need a primary vehicle, it is there and will be passed in good time. So that does not stand up as much of an argument!

Lord Borrie: My Lords, will the noble Lord specify the provision in the Greater London Authority Act which gives power to the Government to do what he is asking them to do today?

Lord Mackay of Ardbrecknish: My Lords, I am puzzled about that, because I cannot remember any such powers in the Scotland and Wales Bills, and I spent a lot of time on them. I suspect that there are provisions elsewhere in the various Representation of the People Acts which could be used if the draftsmen had used their ingenuity and if the Government wished. But I have given the Government the opportunity; the Representation of the People Bill is before Parliament and we do not need to argue this issue any longer. The vehicle exists because we can do something about the problem in that Bill.
	Last week, the noble Lord, Lord Bassam, made some amazing claims about the cost of this. First, he conjured up 40 candidates for mayor and a cost of £30 million; frivolous candidates will rush forward in their tens in order to take advantage of the freepost facilities for a deposit of only £10,000 plus the cost of printing the leaflets. There is no evidence that that has and will happen. Let us take the European elections which were held throughout Scotland. Did anyone pay a deposit and stand in those elections to gain freepost advertising? Did freepost come through my letterbox advertising the local haggis, tatties and neeps restaurant and the local kilt outfitter? It did not; nor did such things happen in London when the European elections were held throughout the city.

Lord Harris of Haringey: My Lords, I am grateful to the noble Lord for giving way. I agreed that that did not happen in the most recent European elections, but perhaps he will cast his mind back to those elections in 1994. In London North, there was a candidate whose main claim to fame seemed to be that he ran, I am sure, a good driving school at the bottom of the Stroud Green Road, which is near to where I live. That was his claim to fame as a candidate for the European Parliament. He obtained freepost and publicity on the back of it. That is precisely the kind of candidate that the Government are talking about.

Lord Mackay of Ardbrecknish: My Lords, if the noble Lord was so worried about that, why did he not persuade his colleagues not to have a freepost at the recent European elections? He does not seem to have tried to lock the door after that horse had bolted, so why try to do so for the London elections? That does not work, either.
	I turn to the cost. The European parliamentary elections freepost cost £21.5 million. That was for the whole of the UK. In Scotland, the total cost for two drops--one for the first-past-the-post candidate and one for the top-up list--cost about £4.5 million. I extrapolate that to about £6 million for London. Therefore, I am afraid that the argument is bogus.
	If the Government were really worried about frivolous candidates, first, they would have produced more than only one example and, secondly, they would have done something about it in the elections in Scotland, Wales and Northern Ireland, the last European elections and--dare I say it?--they would now be doing something about the next series of elections.
	In any case, although I am not an expert on this, I understand that the Post Office has some pretty firm rules about what it takes as election addresses and what can appear on the freepost leaflets. I do not believe that the argument about cost and frivolous candidates works, especially when we have it in other elections. The Government spent money on the freepost because they knew that in Scotland, Wales, Northern Ireland and the European Parliament it was the right thing to do. It is the way to increase interest in elections, to increase turn-out, and to ensure fairness between the parties--all the reasons that led the post-war Labour government to pass the 1948 Act introducing the freepost. It is just as well that the current lot were not in power then or there would still not be a freepost.
	But I should not be surprised: fairness has not been at the forefront since 1997 as regards elections. In the Scottish referendum there were two questions instead of one in order to try and ensure the result. The Welsh referendum was held a week later to try to persuade the Welsh to follow the Scots. There was the closed list for the European elections--I had better not remind your Lordships about that--in order to keep control. There was the method of voting for the Welsh First Minister which was gerrymandered to ensure that Alun Michael got the job, but not Rhodri Morgan who was the choice of the Labour membership in Wales. Just last week there was the same gerrymandering to make sure that Ken Livingstone--perhaps I should not say that name too loudly in case it disturbs the Government--the choice of the Labour members in London, did not win that election. Here we are again. It is all so logical. You fix the Labour candidate by fixing Livingstone; then, if that is not enough and just in case he stands, you fix him again by having no freepost and then you threaten that if your Lordships just say that they are a bit worried about it, you fix the House of Lords.

Lord Mishcon: My Lords, the noble Lord is always so courteous in giving way. I wonder whether he would care to add to his history of democratic events the destruction of the London County Council by a Conservative government because Labour kept on winning in London. Then there was the destruction of the Greater London Council because the Conservative government again thought that the Greater London Council was electing a Labour administration too often. Would the noble Lord care to add those to his list?

Lord Mackay of Ardbrecknish: My Lords, that is pretty old history. But Ken Livingstone was involved in that, and the Labour Party liked Ken Livingstone at that stage.

Earl Russell: My Lords, would the noble Lord care to remind the noble Lord, Lord Mishcon, of the maxim that two wrongs do not make a right?

Lord Mackay of Ardbrecknish: My Lords, I was going to turn to that and say that that is not an argument against not having freepost in these elections. If the noble Lord believes that it is such a terrific thing and is so glad to see it coming back to London, he should want the fullest participation and that involves a freepost.
	I want to examine the argument that somehow your Lordships' House has no right to deal with these matters. I refer first to the convention against voting on secondary legislation. It was not a convention, but an agreement between the Labour and Conservative Front Benches. It never included the Liberal Democrats, as no doubt they will tell us, and it never included the Cross Benches.
	Secondly, and much, much more important, is the fact that this is a new House. It is the House that Tony built. It is the House governed by the Jay doctrine. Perhaps I may remind your Lordships of what the noble Baroness the Lord Privy Seal said in the House Magazine on 27th September last. She said:
	"The House of Lords ... will be more legitimate, because its members have earned their places, and therefore more effective".
	She went further in the Parliamentary Monitor in November of that year when she said:
	"A decision by the House not to support a proposal from the Government will carry more weight because it will have to include supporters from a range of political and independent opinion. So the Executive will be better held to account".
	If those words from the noble Baroness mean anything, I hope that we shall have no complaint from her if a combination of Conservative, Liberal Democrats, Cross-Benchers, and I even hope a few Labour Peers, combine to hold the executive to account. That is what the noble Baroness wants of her new House and I venture to suggest that is what she will get later this afternoon. Is it too much to ask the Government to listen to what your Lordships are saying?
	It is not just your Lordships. We should listen to what the Labour MP for a London constituency, Diane Abbott, said in the other place last week. She said:
	"If the House of Lords knocks the issue back to the Commons, Ministers should not argue that it is just another example of the peers versus the people. In fact it will be the Government versus the people".--[Official Report, Commons, 15/2/00; col. 885.]
	I could not have put it better myself. Even at this late stage I hope that the Government will back down and put some sensible proposals to us. I beg to move.
	Moved, as an amendment to the Motion, to leave out all the words after "That" and insert "this House declines to approve the draft order laid before it on 3rd February and calls on Her Majesty's Government to lay an order which provides that candidates are allowed one freepost delivery per household".--(Lord Mackay of Ardbrecknish).

Lord Goodhart: My Lords, the freepost in parliamentary elections goes back a very long time. In fact, it goes back further than 1948. It was introduced by Section 33 of the Representation of the People Act 1918, following a Speaker's Conference in 1917. I should like to quote from a speech made in the debate on that section in the other place by Herbert Samuel, a future leader of the Liberal Party. He said:
	"The greatest danger in the working of a democracy is the indifference of the elector, and in the laudable desire to limit expenditure and electoral activities in various directions we may possibly overshoot the mark, and find, in future, that we may get much too small a portion of the electorate taking an interest in the election, and that the electorate may not be fully informed of the issues".--[Official Report, Commons, 15/8/17; col. 1297.]
	Those words are at least as true today as they were when they were uttered over 80 years ago.
	We need a freepost for the sake of democracy. Candidates must be able to get their message over to electors. There are, of course, measures to eliminate frivolous candidates. Substantial deposits are required for the London elections. Candidates for mayor must get the signatures of 10 supporters in each London borough. But the elections will be contested by serious candidates of minor parties. Certainly the Greens, who won a London seat in the European elections, may very well do so again.
	Without the freepost, candidates, particularly from the minor parties, cannot get their messages across. The electoral areas are enormous. For the mayor and for the London-wide assembly candidates, the electorate will comprise 5 million people. For the 14 assembly constituencies, the average electorate will be more than 350,000. As I pointed out in the debate on the Representation of the People Bill, more and more Londoners live in blocks of flats with locked doors and entryphones and more and more Londoners have ex-directory telephone numbers. These people cannot be reached by the ordinary methods of canvassing and leaflet delivery; neither can we rely on media coverage of the election. Even we in the Liberal Democrats, with an excellent candidate, control of three London boroughs and strong representation in many other London boroughs, get hardly any media coverage. What hope do the minor parties have of getting a mention, let alone an explanation of what they stand for?
	Freepost is the best method that we have of making sure that candidates can get their message across to any elector willing to go to the trouble of picking a leaflet off the floor by the front door and reading it.
	But the importance of the freepost is not due only to the vast size of the electorate and the inaccessibility of electors. As the noble Lord, Lord Mackay of Ardbrecknish, has pointed out, this is a new type of election. It is the first-ever direct election for an executive mayor. We have new systems of voting unfamiliar to the people of London for both mayor and assembly members. There are several parties in this election with a serious chance of winning Assembly seats. The parties need to tell the electors not only what their programme is, but how to vote for them when they get to the polling station.
	If ever there was an election for which freepost was essential, this is it. Yet the Government propose to deny the electors of London the right to the information they need in order to make an informed choice. That is a matter of concern not only for the Opposition parties, but for many individuals in the Labour Party as well.
	I refer to the debate on these regulations in the other place on 15th February, a week ago. Three of the most powerful speeches in favour of freepost came from the Labour Benches. They were made by Diane Abbott, John McDonnell and Audrey Wise. The noble Lord, Lord Mackay of Ardbrecknish, has already quoted one extract from Diane Abbott's speech. I should like to quote another:
	"It is astonishing to some of us that the Government seriously propose not to have a free post in the election. It might technically be just another local authority election, but Ministers know full well that it is not the same. The number of people involved and the significance of the mayoralty mean that it is more than a local authority election".--[Official Report, Commons, 15/2/00; col. 885.]
	Why do the Government object to the freepost? In part, of course, it is for the unspoken reason of the candidate whose name cannot be spoken, Mr Ken Livingstone. However, what the Government say is that it will be too expensive. In Committee on the Representation of the People Bill, the noble Lord, Lord Bassam of Brighton, spoke of a cost somewhere between £15 million and £30 million. That is absurd. The whole cost of the freepost in 659 constituencies for the 1997 general election was £20 million. As the noble Lord, Lord Mackay of Ardbrecknish, said, the cost for the 1999 European elections was £21.5 million. Head for head, that would work out at around £2 million for London.
	I accept that that figure may be an underestimate because there may be more candidates for mayor in London than the average number of candidates for parliamentary elections. However, there would not be many more and certainly no more than are able to afford not only the deposit but the much more substantial costs of printing a large number of leaflets. On top of that, there are ways acceptable to us in which the cost could be substantially reduced. My noble friend Lord Rennard will explain those later in the debate.
	In any case, the Post Office is a wholly owned subsidiary of the Government. The real cost is not that which the Post Office would charge a promotion business to distribute its junk mail, but the marginal cost to the Post Office in terms of additional overtime and perhaps temporary staff. That would add up to only a fraction of the Government's figures. Even if the cost does amount to a figure as high as £4 million or £5 million, trying to get democracy on the cheap is a very bad bargain.
	The Government have said that a freepost might be abused. Did any abuse occur in the 1999 European elections when any independent candidate could have obtained a freepost to cover the whole of London? No. In fact, there could not be any abuse because, as my noble friend Lord Rennard pointed out in the debate last week, Post Office regulations prevent a freepost being used for advertising.
	The Government then say that, of course, this is a local election and a freepost is not available for such elections. I detect here the hand of the Treasury. "Give way on London", says the Treasury, "and the parties will be asking for a freepost for mayoral elections in Birmingham, Liverpool, Newcastle or Eatanswill". There is a good case for saying that there should be a freepost available for mayoral elections in other large cities, but that is a different case from the one we are making today. The fact is that the London elections are not local elections; they are regional elections. London is not just a city; it is a region of its own. The 14 Assembly constituencies--the smallest unit in these elections--are five times the size of the average Westminster constituency. They are perhaps 100 times the size of the average local government ward. So these are not local elections in any ordinary sense.
	The Government's position amounts to saying, "These are local elections and therefore local election rules apply." You cannot turn an elephant into a rabbit by calling it a rabbit; that is what the Government are trying to do. The final irony, as the noble Lord, Lord Mackay of Ardbrecknish, pointed out, is Watford. If these rules go through for 4th May this year, we shall have a freepost in the local elections for Watford but not for the metropolis of London. That is an absurdity if ever there was one.
	The final argument put by the Government is that it is undemocratic and unconstitutional for your Lordships' House to reject these rules. I believe that argument to be the weakest of all. The Labour Party has produced a travesty of democracy in the way it has selected its candidate for the London mayoral elections and the Labour Government have thereby forfeited the right to preach to your Lordships' House about democracy.
	I shall return to the speech made by Diane Abbott:
	"Ministers should not argue that it is just another example of the peers versus the people. In fact, it will be the Government versus the people".--[Official Report, Commons, 15/2/00; col. 885.]
	On 20th October 1994, your Lordships' House affirmed that it has unfettered freedom to vote on any subordinate legislation submitted for its consideration. That Motion was moved by the noble and learned Lord, Lord Simon of Glaisdale, who, I believe, intends to speak in today's debate. The power to reject secondary legislation must be exercised extremely cautiously. But it is a power that can and should be exercised when it is really needed.
	Your Lordships' House was once described as, "Mr Balfour's poodle". Since the House of Lords Act last year, the present House is no one's poodle. In defence of democracy, your Lordships' House should be not a poodle, but a Rottweiler. That is why, on behalf of my party, I have great pleasure in supporting the amendment moved by the noble Lord, Lord Mackay of Ardbrecknish.

Lord Hardy of Wath: My Lords, I am grateful to the noble Lord, Lord Goodhart, for reminding us of the history of the freepost. However, the one obvious lesson to be learnt from that history is that, since the freepost was introduced--and most strikingly over the past 30 to 40 years--turn-out for elections has markedly diminished. Absurdly low polls were secured in last year's local and European elections. Furthermore, I have been reminded by my noble friend Lord Islwyn of the extremely low turn-out for the Welsh elections.
	If we are really concerned about democracy, then we must conclude that it needs to be robust and generated by activity at a political level. I believe that we have reached the point where the freepost is seen as a replacement for positive political activity. In many wards and in constituencies, people see the freepost as an alternative to old-style canvassing. In many parts of Britain, that form of old-style canvassing in support of both national and local elections has diminished remarkably over the past two decades. If we are to secure higher turn-outs, we need people to knock on doors and deliver leaflets.
	I have fought many elections over the past 30 years. However, over recent years I have found that the leaflet that is handed in to the elector at the door receives more attention than the one that comes through the letterbox with the post. The fact is that today there is a great deal more junk mail than used to be the case. The manifesto submitted by the postman tends to be thrown into the wastebin along with the junk mail that many of us deplore. I give way to the noble Lord.

Lord Goodhart: My Lords, I should like to ask the noble Lord, Lord Hardy of Wath, whether he has had the experience of canvassing over entryphones in London.

Lord Hardy of Wath: My Lords, I have canvassed in London and I recognise the particular difficulties it can present. However, perhaps I may move on to compare London with other areas in a moment. It is worth the effort to canvass because one then secures the agreement of the elector to turn out and vote. A leaflet delivered in the post does not have that effect.
	The noble Lord, Lord Goodhart, seeks to emphasise the difference between London and other parts of the country. However, he overlooks the fact that London is viewed with a degree of suspicion in other parts of the country. I give way to the noble Earl.

The Earl of Onslow: My Lords, I thank the noble Lord. Given the logic of his remarks so far, the noble Lord appears to be seeking to abolish the freepost altogether. Is that what the noble Lord is saying?

Lord Hardy of Wath: My Lords, I am suggesting that we are reaching a point where we should consider that very proposition in the interests of stimulating a more active democracy. It may be that there is a stronger case to be made for state aid for political parties so that the parties themselves are more invigorated and able to persuade others to be active, rather than merely relying on a postal service.
	The difference between London and the rest of the country must also be considered. I accept that London covers a large area and has an extremely large electorate; indeed, it is almost of regional proportions. However, the fact remains that in the great cities, if London gets a freepost, then everyone else will demand it. There would be no justice in denying that. We would then be compounding the error, if error there is.
	I do not understand how people can say, "Well, we'll accept a freepost in London and deny it elsewhere". However, if we accept it elsewhere, we shall be embarking upon a very costly exercise. I know that noble Lords opposite say that businesses and commercial interests may be reflected in increased numbers of candidatures. I am surprised that that is not so. However, I do not believe that the entrepreneurial spirit is quite dead in Britain; it is only a matter of time.
	I recall an article written by Mr Livingstone a long time ago, perhaps when he was rather more left-wing than he appears to be at the moment. In it he suggested that the Members for the industrial north spent their time in the wine bars and other such establishments of Westminster. Perhaps it is only a matter of time before the wine bars that we were once supposed to frequent will decide to put up their candidates. However, the fact remains that we are talking about substantial amounts of expenditure which could grow considerably.
	One reason for my intervention is that in my area a report from Ofsted was recently rather critical of the education authority. The criticism was based largely on the inadequacy of our school buildings. For years in the early 1990s I argued for greater provision for school buildings. The government at that time, who were so keen on cutting public expenditure, allowed my local authority very small sums for that purpose and a backlog of need developed quite markedly. Indeed, I recall pointing out to the Minister at that time that we were allowed to spend £1 per head on the maintenance of our school buildings while across the south of England and in London the sum of at least £8 per head was provided. If we are to quibble about providing decently for our schools but can lavish vast expenditure on an increasingly pointless exercise, then we are not acting with the wisdom expected of this House.

Lord Beaumont of Whitley: My Lords, I understand that this Government are in favour of encouraging democracy and greater participation in the election of representatives at all levels of democracy. I give them every benefit of the doubt in believing that that is true. Within limits, that involves encouraging people to stand whether or not they fall into the predestined idea of being born either a little Liberal or a little Conservative. The Socialist Party has already broken that tidy little one up, and it is open to other parties to do the same.
	I speak on behalf of the Green Party, which already has a representative--a very able one--elected by London on a wide franchise as an MEP. We have a standing as a party in this city, as in this country, and I believe that we should be allowed and encouraged to take part in the democratic process. However, with an electorate of 5 million, the type of personal canvassing which the noble Lord, Lord Hardy of Wath, so rightly believed is good becomes very difficult with the limitations imposed by fax, answerphones and ex-directory numbers.
	My party is putting up a candidate for mayor and candidates for the Assembly. We believe that we shall certainly succeed in getting Assembly candidates elected. That is done on a city-wide basis. We make no secret of the fact that there are parts of London where Green activists are thin on the ground. I am told by my party that one has to go quite a long way to find a member of the Green Party in Barking, for example. However, that does not mean that we should be denied the opportunity of canvassing those voters in Barking and persuading them to cast their votes for what we believe is an extremely good candidate and an extremely good party with an extremely good policy.
	Unless we manage to overturn the regulations and make the Government think again on this point, the people who want to vote for the Green Party over a large part of London will be disenfranchised. I cannot believe that, ideally speaking, that is what the Government want. If they do not want it, the remedy is in their own hands. I hope that they will agree to give way on this important democratic point.

Lord Crickhowell: My Lords, the noble Lord, Lord Hardy of Wath, asked whether it was right that we should accept a freepost in London and deny it elsewhere. I believe that I am then entitled to ask whether it is right that we should have a freepost in Wales and deny it to the people of London. The truth is that his speech could have been made only by a representative of a large and powerful party wanting to deny the possibility of victory to those with fewer resources.
	I, too, have fought elections and have won them. Indeed, I took particular offence at the remarks of the Leader of another place when she suggested that an unelected House is not entitled to vote on these issues. I took offence not least because, if I am in this House at all, it is, I suppose, because of an ability to win elections and then to have served my country in the other place. Therefore, I feel absolutely entitled to stand up and say that it cannot be right that a Government, with the resources of the media and the ability to get the headlines, should seek to deny this very modest tool to those from other parties who may seek to stand.
	The irony of the argument is this: I suspect that in part the object of the exercise is to place yet another obstacle in front of Mr Livingstone. Yet Mr Livingstone is the one person who probably will not be affected by it because he will attract publicity anyway. I have no doubt that, freepost or no freepost, he will probably be as well known in London as any other candidate. It seems to me much more likely that, if he wants to stand, he will get himself better known than the rather curious choice of the Labour Party as a result of the machinations seen in recent weeks.
	I opened The Times this morning and turned to the article by Peter Riddell. I always turn to him because I feel that he is the only political correspondent who will find something good to say about the Labour Government and their actions. When it is not apparent to those outside, it will be to Mr Riddell. He has a charitable disposition when it comes to the actions of the Labour Administration, although he seems rather less charitable about the person he describes as,
	"the hapless and hopeless Lord Bassam of Brighton".
	Of course, I would not be so unkind. However, Mr Riddell is normally charitable to Labour. Yet today he has written:
	"Any second chamber worth the name should act as a check on the elected chamber on constitutional issues".
	He then sets out the arguments almost as powerfully as they were advanced by my noble friend Lord Mackay of Ardbrecknish and from the Liberal Democrat Benches. He points out that if the Government are defeated tonight there will be plenty of opportunity to come forward with an alternative so that the elections can be held. He concludes:
	"They should listen, to avoid making an even greater mess of the elections than they have".
	I must say that I am not particularly concerned if they make a mess of the choice of their own candidate. If they do that, they are likely to get a bloody nose from the electorate.
	As I observed in the House last night during the debate on Welsh affairs, I have a great respect for the ability of the British electorate to give any arrogant and inadequate government a bloody nose. I suspect that the electorate will do that and that the Labour Government will suffer as a consequence of their activities in recent weeks; and that they will suffer in London as they have already suffered in Wales where they were given a sharp lesson in the assembly elections and an even sharper lesson in the Ceredigion by-election.
	But the fact that the Government will be taught a sharp lesson by the electorate is not an adequate reason for this House not to do its undoubted duty to protect the people of this country from the arrogance of an over-weaning Government who are determined to use their weight, authority, money and resources to win elections when the choice should be offered to the people on terms of equality.

Lord Borrie: My Lords, we are currently debating the expenses order to which the noble Lord, Lord Mackay, has moved an amendment. We are debating also the election rules.
	During the speech made by the noble Lord, Lord Mackay of Ardbrecknish, he kindly permitted me to intervene to ask under what provision of the Greater London Authority Act a rule of the kind for which he is asking--namely, one asking for freepost delivery--is permitted. He may well know that there is no such provision. I do not refer to the debates which we have had on the Representation of the People Bill, or, indeed, to those which we may have next Tuesday on that Bill. But it seems to me that unless there is some provision in the Greater London Authority Act of which I have not yet heard which may permit the Government to do what he is asking to be done in today's debate, that part of the debate or the initiation of his amendment is misconceived.

Viscount Cranborne: My Lords, will the noble Lord explain why the Government did not recognise the weakness of the Scotland and Wales legislation which also failed to give the same powers in the same circumstances; and why they did not object to their own drafting?

Lord Borrie: My Lords, I cannot answer that question. As I am not a Minister, I cannot say that I will ask my officials to advise me and that I will reply in writing to the noble Viscount. No doubt Ministers will take account of what was said in the intervention by the noble Viscount, Lord Cranborne.

Earl Russell: Perhaps I may assist the noble Lord. The question of freepost was raised in Commons Standing Committee A on 28th January 1999 by my honourable friend Mr Davey and by Mr Eric Forth. The Minister's reply was:
	"I have already given the Committee an absolute assurance that we will consult before we come forward with proposals. I have undertaken that those consultations will include both the hon. Gentleman's party and the principal Opposition party".
	Under the circumstances, does the noble Lord agree that those remarks deserve the "William Waldegrave award for honest evasion"?

Lord Borrie: My Lords, in so far as I understand the noble Earl, I am sure that he is right.
	I turn to the election rules which we are also debating at this time and refer to the new constitutional doctrine, as it seemed to me, enunciated by the noble Lord, Lord Mackay of Ardbrecknish. He indicated by reference to speeches by my noble friend Lady Jay of Paddington that whatever conventions there may have been--I hope I am not misconstruing what the noble Lord said--this is a new House. That phrase was certainly used. He said that it is more legitimate; will therefore carry more weight; and that more account should be taken of what this House says. I hope that the noble Lord has covered himself as he is a Deputy Leader and I know that the Leaders and the Deputy Leaders of the Opposition have to consult Mr William Hague in order to be sure that everything is all right.

Lord Campbell of Alloway: On the point which he was making, will the noble Lord accept that irrespective of what is provided in primary legislation, here we are faced with two orders? Does he accept that we have the absolute entitlement to reject them and the question is whether we do or whether we do not; and that if there is some reason which appears to us to be just, sensible and reasonable, we are entitled to do so without creating any precedent?

Lord Borrie: My Lords, what I was about to say will certainly provide something of an answer for the noble Lord, Lord Campbell of Alloway.
	I was going to consider the convention as it has grown up. This House is dealing with a Motion to annul an order which is subject to the negative resolution procedure which has not been annulled by the other place. I notice that the noble Earl, Lord Jellicoe, is in his place. I wanted to refer to him and to Lord Salisbury. In the 1960s, which some noble Lords here today will remember and of others will know from their knowledge of political life in the past 20 years, there were important debates on orders concerning Southern Rhodesia. Important statements were made in this House by Members from different parties as to the circumstances in which it was legitimate for this House to go against the elected House on these matters.
	The noble Lord, Lord Carrington, who is not in his place today, said that, certainly, the House of Lords may go in defiance of the elected Chamber. He said that the House was certainly entitled to do that, but he said that surely no government could passively accept such an adverse vote.
	During the debates on the Southern Rhodesia order, some noble Lords had argued that they should vote against an order in exceptional circumstances and that it was legitimate for the House of Lords to do that. But they limited that to certain special circumstances. One was the circumstance mentioned by the noble Earl, Lord Jellicoe, during the debates and he was Deputy Leader of the Opposition. He said that the House would be within its constitutional rights in going against the elected House and thus affording the government and the opposition a period of reflection. That cannot apply in this case because we are talking about the election rules which, as the Minister explained, deal with the nuts and bolts of the London mayoral and assembly elections and there is nothing there which requires further reflection. They have been agreed by all the various parties.
	The other case for this House legitimately going against the views of the elected Chamber was where the House of Lords might be regarded as being better in step with public opinion. During the debates on the Southern Rhodesia order, Lord Salisbury argued that that was an occasion on which the views of the electorate might not be reflected in the House of Commons and, thus, the second Chamber should not feel constrained in voting against the order.
	It is impossible to suggest that the election rules here dealing with the nuts and bolts of the London mayoral and assembly elections do not reflect public opinion. As we all know, there was a referendum after the election of the Labour Government on 1st May 1997 indicating that the public felt that there should be such elections. These rules merely facilitate that.
	The noble Lord, Lord Mackay of Ardbrecknish, indicated that, whatever conventions there may have been in the late 1960s, those conventions are now out of date. It seems to me that something is being evolved on the hoof here by the noble Lord, Lord Mackay of Ardbrecknish. It deserves to be discussed.

Lord Campbell of Alloway: My Lords, I am obliged to the noble Lord for giving way. It is not on the hoof. Has not the noble Lord read paragraph 739 of the Wakeham report? That says that, as of today, this House has an absolute right of veto and therefore every entitlement to support the Motion of my noble friend. Does not the noble Lord understand that?

Lord Borrie: My Lords, I do not regard that as giving this House a complete opportunity, in its present state of evolution on the road to whatever will follow in due course, or any greater right by constitutional convention than was the case in the 1960s in the examples I gave.
	On grounds of constitutionality it is not appropriate for this Chamber to turn down the nuts and bolts detail of the election rules simply as a device to bring something new on to the agenda. There may be other, more legitimate ways, of doing that.

Lord Simon of Glaisdale: My Lords, two questions arise on this amendment. The first, which has been raised for the first time by the noble Lord, Lord Borrie, is whether there is a convention that precludes your Lordships--and should preclude your Lordships--from accepting the amendment moved by the noble Lord, Lord Mackay of Ardbrecknish. The second question is whether, if there is no such convention, this is an appropriate occasion on which your Lordships should exercise a right to move against subordinate legislation.
	The first question should not be necessary. It was decided with perfect clarity by your Lordships in 1994, long after matters such as the Salisbury convention were adumbrated; long after the Southern Rhodesia order. If it is necessary now, nevertheless, to pursue the matter, it is because freedom depends on eternal vigilance, because repositories of power are eternally seeking the aggrandisement of that power. That is one of the symptoms whereby the corruption of power can be measured. It is necessary therefore to now examine the position.
	I mentioned that the matter had been decided. On 20th October 1994 a resolution was brought before your Lordships' House in these terms:
	"That this House affirms its unfettered freedom to vote on any subordinate legislation submitted for its consideration".
	That was explained immediately by the mover of the resolution--I have to say it was myself--in these terms:
	"the purpose of the Motion ... is to make clear that there is no convention which precludes your Lordships from voting on subsidiary legislation".--[Official Report, 20/10/94; col. 356.]
	Nobody ever suggested that there was a legal rule but a number of Ministers suggested that there was such a convention, just as a number of Ministers are now suggesting that there is such a convention. But that is inconsistent with the resolution which your Lordships carried.
	I refer to the measure because, as recently as 7th December of last year, the noble and learned Lord, Lord Falconer of Thoroton, repeatedly asserted that there was no such convention. It was a convoluted argument and selectively quoted, but I need not go into that because the conclusion was quite unacceptable. He finally said that, "The noble Viscount"--that is the noble Viscount, Lord Cranborne, who I am glad to see is in his place behind a splendid camellia and who can deal with this himself--
	"indicated that we [the Conservative government] accept the Motion, but on the basis that there is a convention that says that we do not vote against subsidiary legislation".--[Official Report, 7/12/99; col. 1266.]
	The noble Viscount can no doubt explain that that is obviously incorrect. The Minister was arguing that the resolution was accepted by the Government on the basis that it meant precisely the opposite of what it said and what it was said to be intended to do.
	So that is the constitutional background. There is absolutely no convention which precludes your Lordships from considering the merits of the amendment. I do not desire to say anything on that because the matter has been argued quite conclusively by the noble Lords, Lord Mackay of Ardbrecknish and Lord Goodhart, but it does fall within a slightly wider context.
	The noble Lord, Lord Hardy of Wath, mentioned the falling off of voting figures; very worrying. I cannot presume to agree with him that that is due to the postal vote; that is an entirely fanciful idea. But there is no question but that parliamentary democracy is in a state of some crisis, because the present Government are a strongly centralising, aggrandising government. The phrase that is used is that they are "control freaks". So they are. To adopt the language of the noble Lord, Lord Bassam--I am glad to see him in his place--what has happened in Wales and what is happening in London is a shambles and that brings parliamentary democracy greatly into disrepute.
	In considering further constitutional questions, as your Lordships propose to do, it seems to me that the central issue will be the health of parliamentary government. Anything that derogates from that is to be guarded against very carefully. To me, the knowledge of issues among the people who are to vote--the people who will be affected by the issues--seems to be very near the fundamentals of parliamentary democracy. Therefore, if this matter is put to a Division, I shall vote for the amendment.

Viscount Cranborne: My Lords, I should just like to say what a very great pleasure, as always, it is follow the noble and learned Lord. In what I hope will be a short intervention, I shall return to the central point of his argument. However, in view of the remarks made by my noble friend Lord Mackay of Ardbrecknish, I ought, first, to declare an interest in at least part of his argument as I am president of the Watford Conservative Association.
	Like the noble and learned Lord, I was much impressed by the arguments put forward by my noble friend Lord Mackay. He so clearly embarrassed the Government that they had to persuade the noble Lord, Lord Hardy of Wath, to put forward what I thought, coming from him, was a very remarkable and ideological view. If I understood the noble Lord correctly, he was arguing that any form of public subsidy in elections was a disincentive to vigour and personal enterprise. If that is so, perhaps I may encourage the noble Lord to come across to these Benches because, at least ideologically, that argument would fit very well with some of what we have said. I give way.

Lord Hardy of Wath: My Lords, I do not think that the noble Viscount fully appreciated the point I was making. It may well be that the freepost has served its purpose. It was designed to stimulate and persuade people to vote; and, indeed, to remind them that they should vote. Turn-out has dropped dramatically. That is the matter which should be exercising the minds of politicians today.

Viscount Cranborne: My Lords, with great respect to the noble Lord, who I well remember with affection from another place, I understood from his original argument that he equated the introduction of the freepost with the decline in turn-out at general elections. But, as I understand him now, he has slightly modified that argument. However, that is not something with which I wish to bore your Lordships this afternoon.
	In view of the excellent way in which my noble friend deployed his arguments, I shall not attempt to repeat them. However, I have two questions for the Government. The first relates to the assertion, which was made much of by colleagues of noble Lords on the Government Bench in another place during the course of consideration of this order; namely, that it was really outrageous that an unelected House should have anything to do with consideration of electoral law. If I am right, that was the centre piece of the oratory of the Leader of another place. I am glad to see the noble Lord, Lord Whitty, shaking his head; indeed, it means that he at least sees the inherent weaknesses of his right honourable friend's argument. If that is so, it is rather curious in that, as my noble friend said, the Government are portraying a rather cavalier view of the constitutional place of a second Chamber in our system.
	As former colleagues of mine can bear out, I have long agreed with the proposition that your Lordships' House badly needs reform. It seems to me that the reason for such reform is, above all, to give it the independence and authority with which to carry out its central constitutional role, which seems to me to be very clear: to ensure that another place does its job properly. That role is not to challenge the ultimate authority of the other place, but to have enough independence and authority of its own to insist that it should not put up with the sort of sloppy legislation that governments of both parties have got away with because of their dominance of another place, even when they have not enjoyed a majority as, indeed, the government of whom I was a part did not in the dying days of 1996-97.
	It is very clear that a government with an enormous majority who wish to act in a high-handed manner are able to do so--the evidence that they are doing so is all too clear from the glum faces on their own Back Benches, both in this and another place, when considering this proposition--unless and until your Lordships' House at least puts up its hand and says, "We ought to think about this again". Therefore, my first question to the Government is as follows: if there is to be any sort of parliamentary control in the present circumstances of a high-handed government's actions, who, apart from this House, is in a position to exercise at least a measure of warning? If I understand the constitutional position correctly, it is surely not only the right but also the duty of your Lordships' House to do just that.
	My second question for the Government is quite simply this. The noble and learned Lord, Lord Simon of Glaisdale, talked with his usual authority on the matter of conventions. I was Leader of this House when the noble and learned Lord introduced his celebrated Motion. He was kind enough today to point out that I accepted his assertion contained within that Motion without demur. I have been pleased to see that not only he but also the noble Earl, Lord Russell, have acknowledged that fact. My question arises out of your Lordships' acceptance--and, indeed, my own--of the noble and learned Lord's Motion; namely, what is the nature of constitutional conventions? They are not embodied in law. Is it not true that we have found that constitutional conventions that are universally accepted can, arguably, have greater force and staying power than legislation? But surely those conventions, by definition, can apply only if they are universally accepted.
	I suggest to noble Lords that there are probably only two conventions in our present constitution that are immutable. The first is that the Sovereign always signs legislation put before her after its passage through both Houses of Parliament; and, secondly, that a government will resign and call a general election after they have been defeated on a vote of confidence. Apart from those two, I suggest that it is really impossible to sustain that a convention exists if a large part of Parliament--either House--refuses to accept it. I wonder, therefore, whether it is fair for me to ask the Government whether they agree with the implied analysis in that question.
	If I am correct in that respect, surely it is fair to say that, when he announced that he no longer regarded that convention as applying in the new House, my noble friend Lord Strathclyde was in fact perfectly within his rights to abrogate any adherence he may have had to the convention in the first place. Indeed, he actually had the courtesy in that speech before Christmas to give the Government plenty of notice about his intentions. Therefore, in view of what I said about your Lordships' position as a check on an over-mighty government who dominate another place, and bearing in mind what the noble and learned Lord said about the nature of conventions, especially this one, it seems to me to be perfectly sensible for us to make an independent judgment about the rights and wrongs of what the Government propose in this order. Surely this House is within its rights to vote against the order if its judgment tells it that that is what it ought to do.

Lord Whitty: My Lords, before the noble Viscount sits down, I wish to make something clear and to put a question to him. These Benches have never contested that this House has a right to vote on secondary legislation. Whether it is wise or prudent to do so is another matter. My colleagues have addressed that point. However, we question the propriety--given the noble Viscount's vast experience, I should be interested to hear his view--of threatening to vote down secondary legislation on a ground entirely extraneous to that secondary legislation. That, I suggest, takes us into new constitutional territory where neither convention nor constitution gives us any guidance. I hope that the noble Viscount will respond to that point.

Viscount Cranborne: My Lords, if I understand the noble Lord aright, he accepts that this House has the right to exercise its judgment--as I suggested a moment ago--as to whether or not to vote against a piece of secondary legislation. If I understand the implication of the second part of the noble Lord's remarks, he is resurrecting what I think has now been demonstrated to be a canard during the course of this debate; namely, that this House is doing something which it is not allowed to do because the primary legislation on which this secondary legislation depends does not mention the question of free post. I believe that that is what the noble Lord is saying. If so, I assume that the noble Lord will refer to the Law Officers the question of whether the Government acted ultra vires in the matter of Scotland and Wales, and whether they ought to sue themselves.

Lord Whitty: My Lords, I am sorry to pursue this but I should stop this canard too. Section 11 of the Government of Wales Act and Section 12 of the Scotland Act provide for legislation which could apply the parliamentary provisions to elections for the Scottish Parliament and the Welsh Assembly. The Greater London Authority Act has no such provision. Therefore, what the noble Lord, Lord Mackay, proposes is actually to ask the Government to act ultra vires in respect of current legislation. I query the propriety of that.

Lord Peston: My Lords, I rise--

Lord Campbell of Alloway: My Lords--

Noble Lords: This side!

Lord Peston: My Lords, one would have thought that after about five interventions someone on this side might get a chance to speak. I rise with the normal glum expression on my face to say a few words in favour of the Government for a change. We seem to be debating three topics, one of which I was quite unprepared for; namely, a rather scurrilous attack on the democratic credentials of the Labour Party.

Noble Lords: Oh!

Lord Peston: My Lords, looking at the Conservative Party and having sat in this House unreformed for many years I find it most odd that the Conservative Party of all people should attack us on the ground of parliamentary democracy. For some time I have been intrigued by its commitment to democracy. I did not see a sign of it in the years when I sat on the Opposition Front Bench. Although I am willing to discuss the history of our great parties at some point, I believe that such scurrilous remarks ought to be held for another occasion.
	In my second topic I pour oil on troubled waters. It seems to me that, as regards the question of the mail shot, a reasonable person could come to the view that the noble Lord, Lord Mackay of Ardbrecknish, takes. I do not regard his view as completely unreasonable; namely, that there could be a free mail shot, or that £5, £10, £15, £20 or £30 million should be spent. However, I ask him to consider that an equally reasonable person--if he can conceive of a person equally as reasonable as he is--could come to the opposite view. I am relatively open-minded on the matter. I am certainly not accusing him--as I often do--of being an idiot on these matters. As I say, one could take the view that there should be a free mail shot.
	However, I am afraid that I belong to the school of thought of my noble friend Lord Hardy of Wath. I regard these mail shots as junk mail. My heart sinks at the thought that, if the Opposition were to get their way, more of it would arrive through my letter box. As I say, the Opposition do not hold an impossible view but I ask them to accept that this side does not hold an impossible view either.
	The main topic I wish to debate concerns what your Lordships have a right to do and what they should do with respect to secondary legislation. When I first came to your Lordships' House I rapidly became a member of the Opposition Front Bench. I knew nothing about the conventions of your Lordships' House. I did not know much about Parliament anyway, and certainly not much about your Lordships' House. I reasonably pronounced that we had better divide against an order that I did not like.
	The Leader of the Opposition at that time, the noble Lord, Lord Cledwyn, said, "Under no circumstances can you do that. If you so much as suggest that you will not be on this Front Bench anymore or ever again." I inquired why that was and I was told, "There is a convention that we do not do that sort of thing." My noble friend Lord Richard replaced my noble friend Lord Cledwyn as leader of the opposition and this subject arose on more than one occasion. Even as regards some measures that we considered monstrous we were told about the convention that I have mentioned. The question did not arise as to whether we had a right to divide on these measures--that is the point to which the noble and learned Lord, Lord Simon of Glaisdale, adverted--but whether one should do that. As regards the academic point, I have no doubt of the right to do it. My point is that, until recently, I was under the impression that we simply did not do it because that is not the way that your Lordships behave.
	When my noble friend Lord Barnett and I gave evidence to the Wakeham Commission we included in that evidence the proposition that the convention I have mentioned should change and that in the new, reformed House of Lords noble Lords ought to scrutinise secondary legislation as effectively as primary legislation. We were fairly moderate in our view; namely, we felt that we should be able to vote on it once in order to send it back to the other place for reconsideration. If it helps the noble Lord, Lord Mackay of Ardbrecknish, and others, I should say that that is still my view. However, it is also my view--I ask the noble Lord, Lord Mackay of Ardbrecknish, and others to think about this--that we should do that only when we have had a proper debate in your Lordships' House on how your Lordships' House should behave in the new phase in which it finds itself. We should not do it in an ad hoc manner on an amendment of this kind for no specific reason--

Earl Russell: My Lords, did the noble Lord attend the debate of 7th December 1999?

Lord Peston: My Lords, I have no idea. Will the noble Earl tell me the subject of the debate? Did it concern monetary policy, for example?

Earl Russell: My Lords, it concerned precisely the question which the noble Lord says that we should have debated. We did debate it.

Lord Peston: My Lords, there has been no debate in your Lordships' House of a fundamental kind on the question of how your Lordships should proceed under the new system. I believe strongly that we should have such a debate. We should ask ourselves how we wish to proceed.

Lord Campbell of Alloway: My Lords, I am obliged to the noble Lord for giving way. Does he accept the point that I believe I have made twice today; namely, that this question of primary legislation, whether it confers the power to do this or that, is totally beside the point?

Lord Peston: My Lords, it is not totally beside the point. However, it is beside the point to raise the question in the first place on a matter which is not before us. The issue before us is whether your Lordships should vote on a matter of secondary legislation when many of us were under the impression that we simply did not do it. As far as I know it does not follow logically that because you can do something you should do it. I ask noble Lords to reflect on that point.
	The notion that the whole of parliamentary democracy depends on a free mail shot is a contender for the most absurd proposition of this Session so far. However, that is by the way. As I say, were we to debate how your Lordships' House should behave in the present set-up, I, for one, would say that we ought to approach secondary legislation in a new way. I repeat that it would be a new way. What the noble Lord, Lord Mackay of Ardbrecknish, and the Liberal Democrats propose to do is a new departure and constitutes something completely different from what we did when we were the principal opposition. I believe that the proposal would imperil your Lordships' House in terms of its reasonableness in dealing with these matters.
	Therefore if we debate this and if your Lordships come to the conclusion that they wish to proceed in this way in the future I will support that. I am not sure that my friends on the Front Bench will be that pleased because governments hate anybody doing anything about secondary legislation. I think we should; but I certainly do not believe that we should be doing anything like that on this occasion in an ad hoc manner, as I have said, simply for what I regard as a rather party political point.

The Earl of Onslow: My Lords--

Lord Rennard: My Lords--

Lord Williams of Mostyn: My Lords, we have not had a contribution from the Liberal Democrat Benches for quite a long time. I think it is their turn.

Lord Rennard: My Lords, as you look around our great capital city at the moment you will see a great many posters bearing the same slogan:
	"The biggest job in London: it is your choice who gets it."
	That is the Government's slogan on advertising boards across the city and on the back of every Tube ticket. However, I believe that it rings somewhat hollow in the light of the Labour Party's electoral college system, in which some votes count for more than others. Perhaps the slogan should be changed to,
	"The biggest job in London: it is the Government's choice who you should get."
	The issue of maintaining the traditional right of all candidates in major elections to have one of their leaflets delivered at public expense is the heart of the matter: democratic choice or centralised control. In all large-scale elections in Britain in modern times candidates have been able to have free delivery by the Post Office of leaflets to help them get their message across directly to the voters. This is a large-scale election: more than 5 million people can cast their votes. It is the same electorate as that which elected eight Members of the European Parliament to represent London last June. Candidates then were collectively entitled to one free mailshot during their campaign.
	I shall not pretend that there is any great enthusiasm on the part of the recipients to receive literature from candidates. I cannot imagine many people waiting impatiently behind their letterboxes, eager for the party leaflets to drop through their door. However, when the Government take away their right to hear directly from their candidates on such important issues in this way, I suspect the public will become even more cynical about the whole political process than they are at present.
	The Government are trying to suggest that the election of a mayor and an Assembly for London is just another local election. I do not believe that this equates with the facts. Local elections will continue to be held in London for borough council elections, and there is no local councillor in Britain who will have anything like the power that the mayor of London will have. The present advertising campaign does not suggest that this is a local election. "The biggest job in London", as it describes the position of mayor, is not that of a local councillor. Indeed, if it was only a local election I am quite sure that the Labour Party would not have used the electoral college system to choose its candidate, which has caused it so much trouble. Very often I have heard that the justification for the Labour Party using the same system to elect a mayoral candidate as it used to elect its party leader, and indeed its party leader in Wales, is exactly because the London elections are not merely local elections. It does not require deposits such as the £10,000 which is required to stand as a candidate for mayor of London. So we are dealing with a large-scale regional election--an election the size of which justifies a free mailing.
	The issue has again been raised as to whether this mailshot could be abused for possible commercial advantage. The standard Post Office regulations--I am very familiar with them--are very specific on this matter. They say that communications must contain matter relating to the election only and that a candidate must give a proof of his copy to the Royal Mail area manager and obtain his clearance before printing, so abuse by commercialisation can very clearly be prevented.
	Can the cost be justified? The Government's initial rather absurd estimate of the cost has halved in approximately a fortnight, so that perhaps within a week I hope they may actually agree that the cost of allowing all candidates to have a leaflet delivered together will actually be rather less than the cost of their own advertising campaign, which simply urges people to vote in the election. The independent Electoral Reform Society suggests that one envelope containing all the free postings would cost something between £2 million and £4 million. That compares with the £4 million that I understand is within the Government's present budget to cover the fact that the elections are taking place.
	I have a simpler suggestion. Why not deliver all the leaflets with the poll cards? The poll cards have to be delivered to voters, advising of the date of the poll, the polling station, the hours of opening and so on. In real terms the additional cost would simply be that of collating the literature and of the rubber bands that would be required. In any event, the costs of this operation are really only a payment from one part of the Government to another, namely the Post Office. The heart of this argument is fair, free and democratic competition. At a time when we are all concerned about lack of participation in the democratic process, I do not believe that there should be a weakening of that process by withdrawing healthy competition between candidates which results from free mailing. We should also bear in mind that it is especially necessary for large parts of London where many homes are inaccessible to private callers.

Lord Williams of Mostyn: My Lords, here is the opportunity of the noble Earl, Lord Onslow, to speak.

The Earl of Onslow: My Lords, what wonderful support from the noble Lord, Lord Williams! I thank him. I am always amused to see, when the Government are in deep trouble, that they call upon the noble Lord, Lord Borrie, to try to help them out. I was not going to make jokes about the "hapless Lord Bassam of Brighton" because it is a bit unfair but, I am terribly sorry, I could not resist it.
	It seems to me that the noble Lord, Lord Borrie, made one fundamental historical error. He said that constitutions should not be made on the hoof. The whole point about the British constitution is that it has been solidly made on the hoof by people inventing precedents which did not exist to enhance the liberty of the subject. The on-the-hoof method of constitution making in our case has worked sublimely well.
	That leads me to what happened with the last House of Lords Act. That was constitution making on the hoof--and an actually fairly bruised, unshod hoof at that--in that the Government did not then think of what would happen as a result of getting rid of all of us. What happened was that this House now has legitimacy, which it has not had since 1911. My peerage is not Walpole; it is not Pitt; it is Mr Anthony Blair. It is he who has given me legitimacy. He gave it to me by the House of Lords Act 1999. Therefore I can do what I would not have done when the noble Lord, Lord Peston, was on the Opposition Front Bench. Then, for a perfectly good reason, we did not vote against democratisation, because the House lacked legitimacy, and also because there was an imbalance in the House. The imbalance has been rightly destroyed and we have been given new legitimacy. The consequence of that legitimacy--

Lord Carter: My Lords, the noble Earl talks of the House being in balance at the moment. Out of a House of 661 Peers, there are 181 who take the Labour vote and 480 who do not. Is the House still unbalanced?

The Earl of Onslow: My Lords, it is unbalanced in a sensible way. It is unbalanced in that nobody can rig it. My noble friends on the Front Bench cannot call in Earls and Marquesses of ancient lineage. One of my noble friends says "shame". I actually think it is right that they should not, but it means that the Conservatives cannot win a Division without outside help: nor can the Liberals, nor can the Cross-Benchers and nor can--

Lord Carter: My Lords, that is just not correct. There are 233 Conservative Peers and there are 181 Labour Peers. You have 50 more votes than the Government.

Lord Harris of Greenwich: My Lords, if I may intervene for a moment, would the noble Lord who is now addressing us in response to the Government Chief Whip point out that a very substantial part of the Conservatives' representation is a result of the Weatherill amendment negotiated by the present Government?

The Earl of Onslow: My Lords, the way in which it arose is called constitution making on the hoof, which is the whole point of it. We have a Chamber which does not have the faults of last Session's Chamber. That, I suggest--as it has come about through an Act of Parliament introduced by the Government--gives us the right to alter convention. The terms of the Salisbury convention of 1945 were simple: you do not muck about with our programme; we do not muck about with the composition. The composition, correctly, has been mucked about with. Therefore, it is perfectly reasonable, but with immense responsibility and care, to argue with government and to bring better and more balanced constitutional--call it Whig--arrangements into our affairs. That seems a sensible way in which to approach the matter.
	I hope beyond anything that if, in the--should I say unlikely event of the Conservatives returning to power?

Noble Lords: Oh!

The Earl of Onslow: Perhaps I should not say that. But should that happen, I sincerely hope that I should never hear the argument, if noble Lords opposite again have the pleasure of Opposition, that if they believed that the Conservatives were being idiots, they would not hesitate to say so, because as night follows day, all governments are idiots.
	There is a wonderful letter in The Times today which states that it is interesting to see that the Iranians have run a better election than the Labour Party. I am afraid to say that that goes beyond saying for the arrangements for the London mayor. The fact that the contest is between someone who ruined the GLC and someone who ruined Camden Council is neither here nor there. The choice is not excellent, but there it is.
	To deprive smaller parties of the right to send out their literature when the Government are--what does my brief say--printing an 11-page leaflet about the election--

Noble Lords: Oh!

The Earl of Onslow: My Lords, Ministers have briefs from civil servants, so we must also be allowed to read from them occasionally and it happens to be a brief with which I agree. It is based on fact and so there is no harm in using it. The Government are sending out an 11-page leaflet so that everyone will know how to vote. As the noble Lord, Lord Rennard, said, the cost can be nominal. To deprive the electors of London of that would be wrong and for us not to exercise our constitutional duty would be silly.

Lord Hughes of Woodside: My Lords, I had not intended to speak in the debate but I have been provoked by the noble Viscount, Lord Cranborne, and others who seem to be using the debate on London local government to establish certain constitutional principles which are certainly in dispute. I do not want to argue today about whether this is a more legitimate House as a result of the partial reforms. That is a matter for another day. But we need to look carefully at what is being suggested.
	It is being suggested that through secondary legislation this House should alter and amend primary legislation. It has been said that the automatic right of the House to vote on any issue should not be challenged. The House may vote on any matter on which it wants to. I should have expected that sensible people would at least have considered carefully why they were voting. It is not a question of the right to vote but of whether a vote should be exercised. I have been in the House for a short time, so I hesitate to discuss conventions, but my understanding in relation to orders is that secondary legislation may be challenged only on the grounds that it is not in accord with primary legislation. I have not heard it argued here today that the orders before us are not in accord with primary legislation.
	That being so, the only reason for voting against the orders which makes sense, which was partially argued by the noble Viscount, Lord Cranborne, is that it is the duty of the second chamber to exercise a check on the lower House. The noble Lord, Lord Crickhowell, said that the Government were behaving with perversity and arrogance. If they were doing so, parts of the two orders would go beyond what the primary legislation allowed the Government to do. If that was the case, it would be proper and right to check the Government for exercising powers which they do not possess in primary legislation. But to say that the Government are not doing enough in the orders and to ask the House to say that the Government should go beyond that which is in primary legislation does not make good constitutional procedure.
	Those words will not make any difference. I have been in the game long enough to know that speeches from any Benches are unlikely to sway anyone. One noble Lord might perhaps be swayed, but more than that would be unusual. If the Opposition have made up their minds to proceed and vote the order down either by passing the amendment or otherwise, they are of course free to do so. But it does not make good sense or good constitutional law. I believe that in their heart of hearts the Opposition Front Bench know well that they are being opportunistic. That is fine; good luck to them. But let us not allow them to pretend that they are defending some ancient right of the House of Lords, because they are not.

Lord Ackner: My Lords, I have a characteristically modest point to make. I listened to the noble Lord, Lord Peston, with great interest, because I always do so. As I understand him, he was saying that we are bound by a precedent to which we should keep until we have had a debate to justify its removal. But I do not believe that we are bound by a precedent. It is the Front Bench of each party that is bound by a precedent, not the rest of us. I give your Lordships an example of how that worked out some 10 years ago.
	At that time, my noble and learned friend Lord Mackay of Clashfern, the then Lord Chancellor, specified by way of secondary legislation the characteristics of the conditional fee; in particular, what should be--if I may be allowed the horrible phrase--the extent of the uplift allowed to the winning solicitor. He suggested that the uplift should be 100 per cent. I objected to that figure on many bases, but on the main basis that his own advisory committee had said that 20 per cent was more than adequate and 100 per cent could lead to all sorts of abuses.
	The net result was that I lost by five votes in a well-attended House. It later turned out that if the Opposition Front Bench had voted in my favour, as they encouraged their Back-Benchers to do, I should have won by 10 votes. A rather acid comment in the newspapers to that effect emanated from the Liberal Party the next day.
	So this great convention, to which we should all adhere, applies only to the Front Benches. I asked why there should be such a convention, as it did not seem to make sense. I was told quite simply, "It is done because when the Opposition gain power they hope that the same will happen to them". It is a form of self-defence. It has no logical justification at all. It is not absolute. In a case which concerned Rhodesia, it was not applied. Its substance and its philosophy are so weak that I suggest to the noble Lord, Lord Peston, that he really need not worry his head about it.

Earl Russell: My Lords, there is another convention which has not so far been mentioned and which is more important than any which has been mentioned. I refer to the convention that in a democracy the rules of engagement for the conduct of elections should in general be agreed between the parties. I am not saying that everything should be agreed by everyone. One does not want to turn a need to create consensus into a right of veto. But, in general, rules for elections should be agreed between the Government and at least one major opposition party, preferably including the Official Opposition.
	Through the whole of my adult memory, I cannot find more than one case when elections have gone ahead under rules which were approved by the governing party and by no other party. In this case, the rules for the election are objected to by the Conservative Party, the Liberal Democrats, the Green Party and, I may now add, the UK Independence Party. It is not often that we on these Benches agree with the UK Independence Party. It is not often that the Conservative Party agrees with the Green Party. That elections should not go ahead on that basis is a more important convention than any convention about the management of this House.
	We are told by another place that we lack legitimacy to interfere in these matters because we are not elected. I find it curious that the Government wish the majority of this House to remain unelected. Were they to make this point in order to procure an elected Chamber, we on these Benches would be happy to support them. But should they make this point in order to preserve the right of those who govern another place to do exactly what they like, we on these Benches would not support them.
	I remember well the debate of 20th October 1994, to which the noble and learned Lord, Lord Simon, referred. My noble friend Lord Rodgers of Quarry Bank spoke from the Front Bench and I spoke from the Back Bench. I made the point in that debate that there is an interlocking between conventions. I described them as a roundabout. I agree that it was once the case that we did not vote on regulations. On these Benches we have done it three times since 1994. My noble friend Lord Avebury did it the first time and I did it the second and third times, with the full support of our Benches on each occasion. If the Government do not wish votes on regulations to happen, they must not put through highly controversial matters by regulation. I cannot think of anything much more controversial than to attempt to run an election according to rules acceptable only to the governing party. This is not a Labour Party selection.

Lord Blackwell: My Lords, we have heard a good deal today about constitutional conventions and a number of authoritative contributions have been made. I take a rather simple view that it is the duty of your Lordships' House to consider as best it can its judgment on those matters which are properly brought before it. At least one very powerful argument has been made for why in the mayoral election, above all others, candidates should have the privilege of a free postal system. In local elections and parliamentary elections, most people would concede that the party system works reasonably well. Parties and other organisations with established structures work reasonably well in putting forward candidates and being able to mobilise supporters and distribute literature.
	They work well because, on the whole, electors in those elections cannot often know individually the many candidates. When they elect a governing group to a council or indeed to Parliament, they need to know that there is a coherent set of policies. Therefore, the party labels or organisational labels have a great value. The organisational structures behind them work to put those views across to electors. If there is one argument for having a directly elected mayor, it is that it allows individuals of stature and individuals who can make a contribution to their city to come forward as valid candidates for mayor without the support or backing of that kind of organisational structure. That is one argument for having a directly elected mayor as opposed to simply the leader of the majority group.
	It stands to reason that that kind of candidate cannot depend on the canvassing structure and local system that party politics provides. Therefore, if we want to have candidates of calibre outside the party structure put themselves forward for mayor, we have to have an electoral system that recognises their needs and encourages that kind of candidate to stand. At the end of the debate, I should like to understand from the Government whether they accept the force of those arguments. Will they accept the principle that, in order to support the notion of a directly elected mayor, such candidates should have a free postal system? If they do accept that, it is incumbent on them to explain how they will provide for it.

Lord Harris of Haringey: My Lords, I declare an interest in that I have been selected by my party as a prospective candidate for the Greater London Assembly. There has been a good deal of discussion within the Association of London Government, which I chair, about the issue and the principle of freepost. All of the parties represented on that association have taken the view that freepost would be appropriate for this election because, to use the words of my right honourable friend the Deputy Prime Minister, this is a local authority that is unlike any other. It would not necessarily set a precedent of that kind. But the principle of freepost has to be seen as part of a package with the other arrangements which would exist in terms of the way in which an election is conducted. What is unfortunate about the debate is that we have not looked at those other elements of the package. Clearly, a cost is associated with having freepost. However, the parallel issues about the threshold which enables people to stand have not been addressed by the opposition parties today.
	We have heard some strange arguments which suggest that somehow a freepost is the only bastion that exists to protect a proper democracy and that somehow it is the only thing that enables small parties to flourish and to operate in an electoral system. The reality is that freepost is not free for the parties. It is some time since I was engaged in a parliamentary election. That was as a chair of a constituency party. However, if I remember correctly, the activities associated with a freepost require the printing of the material itself, the enveloping and addressing of that material, and the bundling of that material into the precise order that the Post Office requests, which is not necessarily an order which any of us would immediately recognise as being a logical way of putting it together. That is a quite complicated process which requires a substantial degree of resources and organisation. Those will not be readily available across London to a party which merely creates itself and has only a small membership, but it is a substantial consideration. A freepost is healthy for democracy, but let us not pretend that it is the bastion of democracy.
	I found it surprising to be told by one noble Lord that we were taking away from the public the right to hear directly from candidates. That is a very strange statement. There will be a whole variety of ways in which the public will hear directly from candidates. I, too, have a nostalgic belief in the traditional process of knocking on doors and speaking directly to electors. But the mass media will be the method by which people hear from candidates, particularly in the mayoral election. So let us not get too excited about this. A freepost is helpful for the conduct of democracy, but it is not an essential requirement.
	The issue of frivolous candidates concerns me. The noble Lord, Lord Mackay of Ardbrecknish, brushed aside the issue of a north London candidate in the European elections in 1994. I accept that north London is a long way from Scotland and that he may not have been familiar with the circumstances. The argument put by some noble Lords that there are rules that would prevent people promoting their business, for example, goes only so far. If one's claim to be an appropriate candidate for the post of London mayor or for membership of the European Parliament is that one runs an extremely successful driving school located in the Stroud Green Road, that is in effect a way of promoting that driving school. I do not suggest that that was the sole motivation of the candidate in this case--

Lord Forsyth of Drumlean: My Lords, I am grateful to the noble Lord for giving way. Has he not just destroyed his own argument? He started by saying how much effort was required to take advantage of freepost. Is the truth of the matter that the only frivolous candidate he fears is Ken Livingstone, which is what all this is about?

Lord Harris of Haringey: My Lords, my point is slightly more complicated. I am suggesting that if a candidate who runs a commercial undertaking believes, perhaps erroneously, that the business can be promoted through this process, that candidate will put resources into ensuring that the leaflets are printed, bundled up and enveloped, and that the requirements of the Post Office are met. What one gets is a free postal delivery instead of having to pay a substantial cost over and above those extra costs.
	I do not regard Ken Livingstone as a frivolous candidate. I think London could do better, but it will be fascinating to see what decision he takes. My only point is that I wonder whether the purpose of the Opposition's position today is not simply to delay matters to allow Ken Livingstone more time to make up his mind.

Lord Rennard: My Lords, will the noble Lord accept that it would, for example, be impossible under Post Office regulations for the quoted driving instructor to advertise the phone number or address of the driving school and it would therefore be a pretty useless mailshot for him?

Lord Harris of Haringey: My Lords, I do not accept that. The location of the driving school would be described. I am sure that the noble Lord is familiar with the Stroud Green Road. It is not an extremely long road. Usually an address is added at the bottom under the heading, "Printed and published by", which would provide the clues for those with good eyesight. The point is that the mailshot would provide an opportunity that could be used in that way. It is a serious concern. It would be wrong for your Lordships to pretend that it does not exist and that there is not a cost to government in so doing.
	The other elements of the package have not been mentioned. The threshold for entering the mayoral election is quite low. It is £10,000 and 10 signatures in each of the various London local authorities. That is not a large number of signatures. The most difficult requirement is to find 10 electors in the area of the Corporation of London, which has some 5,000 electors--so in order to stand as a candidate one would have to find one in 500 electors to provide a signature. That is the most difficult requirement that has been set. But if the same threshold of one in 500 electors were applied, which is close to the threshold that applies in terms of signatures to stand as a local government candidate: in practice, 10 signatures in an electorate of, say 5,000--it would mean a requirement of 10,000 signatures across the Greater London area. That would require serious commitment by a political party, and one which candidates who wanted to stand for merely commercial or frivolous ends would find quite difficult. Similarly, if the deposit were put on the same level as that for parliamentary elections, it would be a much more substantial figure, running into several hundreds of thousands of pounds. I do not suggest that those thresholds would necessarily be appropriate. What I am suggesting is that the question of freepost must be examined in the context of the threshold for putting forward a candidacy.
	The key point is that the amendment moved and the points made are inappropriate for this order. I suggested, perhaps frivolously (a word that has been repeated a number of time in this debate), that the idea of the amendment was simply to give time for an individual to consider his position. However, I wonder whether this House wants to go down on record as voting against an order which could have the consequence of delaying the election in London, when we know that the people of London want the Greater London Authority and an opportunity to vote for a mayor and assembly. I wonder whether this inappropriate move is simply designed to postpone the election. I wonder why, when there are other opportunities on the parliamentary timetable to raise this matter in a more appropriate way, this strange device has been cobbled together for this occasion if it is not to make some rather silly and petty party political point.

Lord Peyton of Yeovil: My Lords--

Lord Williams of Mostyn: My Lords, I have tried to take the sense of the House generally. It seems to be that we might perhaps hear from the Liberal Democrat Front Bench and then the Minister.

Lord Peyton of Yeovil: My Lords, there was a breathtaking moment in the early part of the noble Lord's speech when I thought that he was going to oppose his Government. After that, he lost his sense of direction and went in quite another.
	I shall not speak at any length because I understand that Front Benches are united in wishing to shut us up. I am always very diffident. If I have any reputation at all in this House, it is for being exceedingly diffident for the convenience of the Front Benches. I merely want to make some brief points. First, I am heartily sorry that there is to be an election for the post of mayor of London. I deeply regret it, and I believe that the Prime Minister will come to regret it. So far, the process has not been a source of great satisfaction to any political party except the Liberals, who have a quarrel regarding a certain anonymity on the part of a very worthy candidate.
	As to the nonsense that has been talked about conventions, I entirely agree with the noble Earl, Lord Russell. A custom has grown up whereby, when there is to be a fairly large election--no one can doubt that an election for the whole of London is quite a large affair--there is a general expectation that there will be a free electoral mailshot for every household. It is astonishing to hear such a stalwart supporter of the Labour Party going so far as to say that the great democratic institution of a free mailshot is equivalent to junk mail. It may be treated as junk mail, but surely it does not come well from him to talk as though it were.
	In these circumstances, the Government have no grounds whatever for denying this. To say that we are all being rather frivolous and that we are making party political points is absolutely misplaced. The Government have made a very serious error. They ought not to press it further. I hope that they will receive a sharp lesson in this House tonight.

Lord McNally: My Lords, first I should make clear to the noble Lord, Lord Harris, that at least the Liberal Democrats have been ready for this election for the past six months. As far as we are concerned, the sooner it takes place the better. The noble Lord is such a Pooh-Bah that it is difficult to know in what capacity he addresses the House. However, it was clear from his speech that today he addresses the House as a Millbank loyalist. I would rather have heard him speak in his capacity as chairman of the Association of London Government, which I understand has called for a freepost.
	We have had a debate of high quality which has gone some way to meet the requirements of the noble Lord, Lord Peston. A good deal of the debate has been concerned with the shape, powers and responsibilities of the reformed House. The crux of the matter was put by my noble friend Lord Rennard, who spoke of posters all over London. We are talking about the biggest job in London. It is true that the subject we are debating tonight--freepost--is not within the orders, but it can be argued that in such circumstances we can use the powers of this House to right a negative as well as a positive wrong. As has been put forward time and again, in the raft of reforms put forward London was always seen as being on a par with Scotland, Wales and Northern Ireland.
	As to the views of the noble Lords, Lord Peston and Lord Hardy, about a free mailshot, that is not the only buttress to democracy. However, as politics becomes more expensive and we move into Internet democracy, the power and wealth of the big battalions become stronger and stronger. For that reason, it is very important that we retain those elements in our electoral process that assist smaller parties and individuals.
	The Government's arguments about cost are pretty rich. This is a government who have spent more on publications and propaganda than any other in peacetime history. To start rolling out the cost element is almost the last refuge. I suspect that the last refuge is lawyers' niggles, to which the noble Lord, Lord Borrie, referred. As was pointed out, they are always brought out in an emergency. Today, they have been successfully blown out of the water collectively by the noble and learned Lords, Lord Simon of Glaisdale and Lord Ackner. The noble and learned Lord, Lord Ackner, let the cat out of the bag. We are all aware of the convention which the Government clutch to their bosom. As always, it is not a convention but a convenient old boys' Act worked out between Front Benches. The Government anticipate that they will need it at some time and so do not rock the boat for the Opposition.
	I am concerned that this should have been done by the Labour Party in connection with its raft of constitutional reforms. A number of speakers, among them the noble Lord, Lord Hardy, spoke about the fall-off in democracy. Before the election the Liberal Democrats and the Labour Party had a committee which looked at a raft of reforms in an attempt to re-engage the public in the democratic process. I take pride in the speed with which most of those pledges have been carried out.
	The noble Lord, Lord Peston, spoke about the Labour Party and democracy. No one doubts the party's long and historic commitment to democracy, but the chapter of incidents that have arisen as it tries to bring about these constitutional changes has, frankly, damaged its credibility. In Scotland we have seen the attempt to prevent Dennis Canavan from standing, which was quickly reversed by the will of the electorate. We saw the shambles in Wales involving Rhodri Morgan. We have also witnessed the farce in London over the past few weeks. The Labour Party is now becoming as much associated with fix and fiddle in elections as the Conservative Party was with sleaze, and it will do it as much electoral damage unless it cuts it out. My friends in the Labour Party--I have a few left--tell me that the problem lies with an over-promoted general secretary and a coterie of advisers around the Prime Minister who believe that they invented politics in 1997. If so, it behoves some of those on the Benches opposite to make them think again.
	I was much impressed by the speech of the noble Lord, Lord Hughes. I hope that he will read the speeches of Diane Abbott, John McDonnell and Audrey Wise. He will be aware that when he was in the Commons he and they would have been part of the Tribune Group. There are now more members of the Tribune Group in this House than down the corridor. That is how matters develop.
	The Labour Party organisation as I understood it was that of Sara Barker, whose slogan was "The triumph of ideals must be organised", not that the triumph of the Prime Minister must be obtained at any cost. It is time for the Labour Party to get behind its old principles. If by voting down this order tonight we give the Government time to think carefully as to whether in this election to provide London with new governance, which is a great achievement for the Labour Party, they should connive in such a shabby act as to deny a freepost, I believe that we shall be doing a service to that party as well as the country. The noble Lord, Lord Crickhowell, said that the electorate would give the Government a bloody nose. I believe that if they pursue this course much longer the electorate will do so. In the meantime, I believe that we should give them a bloody nose.

Lord Whitty: My Lords, we approach the point where the noble Lord, Lord Mackay of Ardbrecknish, must decide whether to press his Motion and other Lords must decide whether to follow him. This House has reached a critical point. The noble Lord, Lord McNally, may well be right that we have had an excellent debate; certainly, we have heard some excellent speeches. But it is also evident that none of those speeches has addressed the order that I moved two-and-a-half hours ago or quibbled with either that measure or the election rules, to which the noble Lord's Prayer relates. In other words, we have had a debate about a matter that is not actually before your Lordships' House.
	I do not say that noble Lords should not conduct such a debate. In this House there have been a number of debates whose relationship to the Motion on the Order Paper has been remote, to say the least. However, I believe that when the House decides whether to use its undoubted constitutional right--which it rarely does--to vote down secondary legislation it should do so on the basis of the legislation before it, not legislation that is not before it. If this House did anything else it would not be exerting its constitutional role to ask the Government to think again or performing its role to improve legislation. It is, therefore, a slightly curious debate.

Earl Russell: My Lords, has the Minister ever objected to a Bill because of a clause that is not there?

Lord Whitty: My Lords, the noble Earl has on many occasions objected to a Bill because of a clause that is not there. However, he has not broken a convention which, in the case of affirmative resolutions, has existed for 32 years. I do not often refer to great tomes such as Erskine May. However, I have checked Erskine May because the Library's research document does not answer the point definitively. Erskine May indicates that at no time has this House ever adopted a Prayer against a negative Motion. We are therefore in new territory. Of course the House has a right to do so. I have not denied that. The Leader of another place has not denied that. We have queried the wisdom of so doing. We have queried the prudence of so doing. We have queried the political implications of so doing. But we have not queried that right. Noble Lords now need to assess for themselves whether the wisdom of so doing is clear.
	I referred to a period of 32 years. The last time this House voted down an order of this kind was on the basis of sanctions against Southern Rhodesia. It was a vote which I thought brought shame on the House. Nevertheless, it voted on the order that was before it. In 32 years we have not done the same. I believe, therefore, that we need to think.
	The issue of the freepost is entirely extraneous to the matters in the rules and the order. The noble Earl, Lord Russell, shakes his head. He has said that it is the convention in these matters for the parties to be in agreement on the rules. These rules, which are fairly extensive, and this order, which is also fairly extensive in relation to the expenses, were subject to that convention: the parties agreed them.
	Moreover, as I made clear to the noble Viscount, Lord Cranborne, not only does the noble Lord's amendment require us to do something which is not covered by the orders--this is not a lawyer's niggling point, something my noble friend Lord Borrie found himself condemned for saying--it also asks the Government to act ultra vires in terms of existing legislation. Noble Lords may well be of the opinion that the Government, this House (we are all partly guilty) and another place--Parliament as a whole--were remiss in not putting such a provision in the Greater London Authority Act. However, none of us did. The brief reference made in Committee in another place was passed over not only by my colleague, Nick Raynsford, but also by the Opposition in another place. It was not pursued. The matter was not raised in this place, so we did not make provision. The power, therefore, does not exist to do what the noble Lord's Prayer requires us to do.
	This again is utterly and completely unprecedented territory. It is not a question of constitutional rights. It is not a question of breaking a convention, which I accept your Lordships have the right to break. It is moving into completely new constitutional territory. I hope that noble Lords recognise that.
	Noble Lords raised the precedent of Scotland and Wales. I repeat--noble Lords seem to have missed this point--that in relation to Section 11 of the Government of Wales Act and Section 12 of the Scotland Act there is power for the Secretary of State to bring forward regulations which apply the national election provisions to the elections for that Assembly and that Parliament. I repeat: the equivalent provision does not exist in the Greater London Authority Act. We are therefore in totally new territory. I beg the noble Lord, Lord Mackay, and those who are tempted to follow him, to consider what they are doing.
	It is legitimate for the noble Lord to raise the issue in a different context. He raised it at Committee stage of the Representation of the People Bill. However, it is not legitimate and verges on serious impropriety and abuse of procedure to debate an entirely separate issue which we are not allowed to raise under the primary legislation in this context, force through a Division and vote down secondary legislation on the basis of such a move.
	This is not the House of Lords behaving like the watchdog of the constitution. The noble Lord, Lord Goodhart, put it better when he said that we are behaving like a Rottweiler, an undisciplined and undisciplinable animal. That is not the role of the House of Lords in any of our views of the future; and it should not be a role advocated by the Front Bench of the Liberal Democrats. I am rather surprised that the noble Lord did so.
	What is to stop my noble friend Lord Stoddart of Swindon, for example--I see that he is not in his place--from moving to vote down secondary legislation on matters of education on the grounds, for example, that he objects to the common agricultural policy? Once we get into that territory, your Lordships are using one area of law, of regulation, to vote down another. It amounts to an abuse of the proceedings of this House and, I would say, leads us not only into very difficult territory but also territory which--if the noble Earl, Lord Russell, were not about to jump to his feet and accuse me of asperity of speech--I would suggest was close to a serious criminal offence.
	However, for the record I address some of the points raised in relation to a freepost. I am sure that we shall return to the issue next Tuesday in relation to the Representation of the People Bill. I turn, first, to the question of cost. The figures referred to by my noble friend Lord Bassam of Brighton, quoted elsewhere, relate to the original proposition of the noble Lord, Lord Mackay; namely, that we adopt the same procedure as for national elections in the Greater London proposals. That would mean an addressed envelope to every elector costing £750,000 per party. On the basis that there might well be 20 parties contesting the mayoral plus the GLA elections, the cost could amount to £15 million or more. The proposition today is slightly less expensive in that the delivery is addressed to households. But even that would cost £420,000 per party and therefore over £8 million.
	Not only do we not have the primary legislation authority; we do not have the budget to pay for that. Therefore the money would come out of the GLA budget. As my noble friend Lord Bassam rightly pointed out, the budget of £35 million is the administrative budget for the GLA. The £3 billion relates to all the expenditure by the police, the Greater London Development Agency and Transport for London and not the administrative expenditure of the GLA. We are suggesting, therefore, that we take £8 million out of that £35 million for the first year of the GLA'S operation. We have at the very least to consider the wisdom and acceptability of doing that in relation to London.

Lord Mackay of Ardbrecknish: My Lords, before the Minister leaves that point, and to save bringing forward the issue later, where is the £4 million coming from to send out the 11-page leaflet to every household?

Lord Whitty: My Lords, that expenditure will come from central funds and we have the authority to pay. We do not have the authority to pay, nor do we have the budget allocated for us to pay, under the GLA Act.
	I wish to raise one other point on this extraneous matter. It relates to abuse. A number of noble Lords suggested that we do not want a freepost in case my good friend Ken Livingstone decides to run as an independent and we would wish to stop him getting any publicity. I think that noble Lords recognise the somewhat absurd implications of that.
	However, we wish to stop abuse in this area. We are talking about a circulation to 5 million people. My noble friend Lord Harris referred to a driving instructor somewhere in Camden. I have a more exciting example. In the recent Kensington and Chelsea by-election, the electors of Kensington and Chelsea--one might have thought that they had had enough excitement with having Nicholas Scott, Alan Clark and now Michael Portillo as their MP--were treated to 19 candidates. One of the candidates who took advantage of the freepost was a Ms Louise Hodges of the Daily and Sunday Sport Party. Some of her policies were quite respectable. However, the implication, to be frank, is not quite so respectable. She does not put her telephone number but only the address of the Daily Sport. I believe that that semi-commercialisation of the election and freepost process--the current procedures of the Post Office, to which the noble Lord, Lord Rennard, referred, were incapable of stopping it--is a possible abuse. To put it at its lowest, we should at least consider these implications before we move into this election, leaving it open to abuse of a mailing to 5 million people of that sort of material.
	I return to the substance of what I have been talking about. The election rules that are before the House have been agreed between the parties. The expenses provisions that are before the House have been agreed between the parties. There is no dispute about that. Not one noble Lord who has spoken has raised any objection to that. Yet we are faced with a proposition from the noble Lord, Lord Mackay of Ardbrecknish, that we should vote against those provisions. If we stick with that position from the House of Lords, of course we shall have no rules for the election; we shall have no limit on expenses for the election. Is that really in the interest of Londoners or the interests of democracy?

The Earl of Onslow: My Lords, that is simply not true. All you have to do is reintroduce an order which proposes something slightly different. That canard is simply not a runner. That is a bad metaphor!

Lord Whitty: My Lords, as ever, I am grateful to the noble Earl for giving me guidance as to what I may unfortunately have to do later tonight. I hope that I shall not have to do it. Until we submit virtually equivalent orders and the House agrees those virtually equivalent orders, we have no basis on which to fight the election and no basis on which to limit expenses in that election. That would be an absurd situation in which to place the House.
	I have contended throughout that not only does this take us into uncharted territory, which I submit your Lordships should be cautious of entering, but that it is also particularly inappropriate that we should do it today. The noble Lord is well aware of, and has referred to, the fact that an appropriate Bill is possibly going through Parliament at this time. We have very good arguments against his proposition, which we shall deploy on Report. It may be rather late in the day to do it. We should perhaps have included that provision in the GLA Bill. Belated though it may be, however, it must be within the scope of the Representation of the People Bill. My noble friend Lord Bassam will be taking the Report stage of that Bill on Tuesday. That surely will be a legitimate opportunity for the noble Lord to press these matters--not by effectively rejecting a basis for fighting the London election on which we are all agreed.
	If the noble Lord wants to present any propositions, or indeed if we have any new propositions, which will avoid huge cost to the taxpayer and avoid the possibility of abuse, my noble friend Lord Bassam and I shall be quite happy to talk to him or to anybody else about sensible propositions which meet our criteria. We are not, however, prepared to be bounced--I might even use the term "blackmailed" at this point without impugning anybody's integrity in a personal sense--into surrendering our advocacy of this order and these rules on the basis of something which is irrelevant and on the basis of a Prayer which would bounce the Government into doing something which is ultra vires. I hope that the noble Lord, Lord Mackay, will mark my words well in this respect. I hope, therefore, that the House will also understand what it will do if it follows the noble Lord's lead.

Earl Russell: Is the Minister about to tell us that this Government have never bounced anybody into doing anything?

Lord Whitty: Only within our vires, large though they may be!

Lord Mackay of Ardbrecknish: My Lords, I wish I could say that I am grateful to the noble Lord, Lord Whitty, for his summing up. I am not sure that I can say that. I believe that we have been round the same sort of course which the media went round and which we went round last week on the Representation of the People Bill. The Government's case seems to be entirely that we cannot complain about the orders simply because something is missing. That is new. I have heard Labour Members complaining fairly vigorously about many matters being missing from legislation and yet it has never stopped them.
	The more serious point made by the noble Lord, if I heard him correctly, is that there are no powers in the Greater London Authority Act. I have checked that the Scotland Act does not directly mention these matters, but it does give power under Section 12(4)(a) to,
	"apply, with or without modifications or exceptions, any provision made by or under the Representation of the People Acts or the European Parliamentary Elections Act 1978 or by any other enactment relating to parliamentary elections".
	Section 405(1) of the Greater London Authority Act seems to give Ministers powers every bit as wide as the powers that I have mentioned under the Scotland Act. It states:
	"Any Minister of the Crown may by order make such amendments, repeals or revocations as appear to him to be appropriate in consequence of this Act, or of any regulations and orders under this Act ... in any enactment contained in an Act passed before the relevant day or in the Session in which that day falls".
	That is a fairly extensive power.

Lord Whitty: My Lords, that is the standard clause which appears at the end of a number of pieces of legislation. The key words are,
	"in consequence of this Act".
	If it is not referred to elsewhere in the Act, one cannot invoke it for this purpose.

Lord Mackay of Ardbrecknish: My Lords, I am not a lawyer, neither is the noble Lord the Minister, but it seems to me that it is a matter of common sense to suggest that such a freepost is in consequence of an election, and I believe that the public would agree with that. The Government may therefore find that they are able to try these powers. In any case, as we have said frequently, they could use the Representation of the People Bill. All that I derived from the last part of the Minister's statement is that we and the Liberal Democrats could put forward amendments to the Representation of the People Bill and take the temperature. We have now twice taken the temperature and I have not seen the patient--namely, the Labour Party--show any sign of responding to the medicine that we have tried to administer. It is simply not prepared to budge an inch. It is not even prepared to concede that there may be an argument in this respect or that there may be ways in which we could address this issue. I am not therefore terribly impressed by the Minister's point.

Lord Whitty: My Lords, I thought that I had made it clear in the latter part of my speech that if the noble Lord wished to pursue this matter in that context, my noble friend Lord Bassam and I would be willing to talk to him and to the Liberal Democrats to see whether there is a way of meeting their objectives which does not meet the objections that we have currently spelt out. I believe, therefore, that mine is a fair reaction to the points that have been raised in this debate. It does not alter the basic impropriety of pressing the Motion tonight, but it is a positive and a constructive reaction.

Lord Mackay of Ardbrecknish: My Lords, it is possible that in that event we would make a tiny bit of progress but, of course, we would still have no guarantee that our position would be met any more sympathetically when we come to Report stage next Tuesday. It would give us more confidence in the noble Lord's bona fides if he simply decided not to proceed this evening with the affirmative order, but to withdraw it, in which case my amendment would fall and I would certainly withdraw my Prayer against the negative instrument. Those matters could then stand aside until we see what happens next Tuesday. In that way, the Government would have to produce some goods next Tuesday. If they do not produce any goods next Tuesday, we would still have some power.
	The fact of the matter is that if I do what the Minister would like me to do, I shall be left tomorrow morning absolutely powerless. The Liberal Democrats and I would be left without any clothes at all so far as this battle is concerned. We want the Representation of the People Bill for other reasons, and the Government know that we would not play ping-pong in relation to it and invoke the Parliament Act. Frankly, the Government are asking me to give away what little weaponry I have to try to persuade them to come forward with a decent solution.

Lord Whitty: Far be it from me to advise the noble Lord on his powers; this is not the normal job of the Government Front Bench. Nevertheless, his Prayer is, of course, a Prayer against a negative resolution. If he withdraws it, it is still laid before the House and he can therefore bring forward his Prayer before the House at any time. He would not be bereft. I hope that he does not use it; I would expect him not to use it; and I would expect a constructive outcome. Nevertheless, it is untrue to say that he would be bereft of all power if he did not press his amendment tonight.

Lord Mackay of Ardbrecknish: My Lords, I understand that, but we are left with the affirmative order. I do not believe that any damage would be done to the Government's position if we could genuinely make progress next Tuesday. No damage would be done to the Government's position if they withdrew their affirmative order and I withdrew my Prayer. That would put us on all fours and we could go on to discussions; see what conclusion we could reach; come forward with an agreed package at the Report stage, or even at Third Reading if the worst came to the worst, of the Representation of the People Bill; and then the affirmative order before us and the negative order would pass happily without further comment. That is a reasonable proposition, rather than asking the Liberal Democrats and myself to take on faith that we shall make a little more progress on Tuesday.
	The Minister can withdraw his Motion, which means that my amendment falls. I shall then happily withdraw my Prayer. If the Minister proceeds with his affirmative order, I must ask my noble friends--and my new noble friends, too--to join me in the Lobby.

On Question, Whether the said amendment shall be agreed to?
	Their Lordships divided: Contents, 215; Not-Contents, 150.

Resolved in the affirmative, and amendment agreed to accordingly.
	Motion, as amended, agreed to.

Greater London Authority Elections Rules 2000

Lord Mackay of Ardbrecknish: My Lords, I beg to move the Motion standing in my name on the Order Paper. Moved, That an humble Address be presented to Her Majesty praying that the rules laid before the House on 8th February be annulled (S.I. 2000/208).--(Lord Mackay of Ardbrecknish.)

On Question, Whether the said Motion shall be agreed to?
	Their Lordships divided: Contents, 206; Not-Contents 143.

Resolved in the affirmative, and Motion agreed to accordingly; it was ordered that the Address be presented to Her Majesty by the Captain of the Gentlemen at Arms.

Lord Whitty: My Lords, with the leave of the House, I feel that it would be appropriate for me to make a brief statement. We shall return to the concerns so clearly expressed in this debate in our discussions on Report of the Representation of the People Bill next Tuesday.
	As regards the orders that were put before the House today, we shall reintroduce those orders at the earliest opportunity.

Electronic Communications Bill

Lord Sainsbury of Turville: My Lords, I beg to move that this Bill be now read a second time.
	I am delighted to introduce this important Bill. The Electronic Communications Bill will help achieve the Government's target for making the UK the best place in the world for e-commerce by putting in place the right legal framework. Just as Britain led the world in the first industrial revolution, so the Government are determined that Britain will be among the winners in the knowledge economy.
	Our strategy for achieving this ambitious target is clear. We need modern, competitive markets that will enable the fast growth of electronic commerce, confident consumers with the skills and access to exploit the potential of the Internet and a government committed to exploiting the full potential of the new technologies to transform and improve the ways in which we deliver services to citizens and citizens communicate with the Government.
	The Bill will help to create the right market framework. It will lay sound foundations for Britain to become a dynamic, knowledge-based economy by promoting electronic commerce and electronic governance. Bill Gates has described the Bill as "the model for Europe". The CBI said today:
	"The CBI would now like to see the Bill pass to the statute book as speedily as possible, and we welcome and support the Government's commitment to try and enact this Bill by April".
	Through the Bill, we plan to be one of the first countries to implement the EU Electronic Signatures Directive, so that British firms can benefit from the emerging on-line single market. The UK is rightly being seen as Europe's e-commerce hub; not least because of the co-regulatory approach we are adopting with industry--an example being the innovative T Scheme to provide trust services to business and the public. I will say more about the T Scheme later in my speech.
	The Bill will build trust in the authenticity, confidentiality and security of on-line transactions. It would confirm the legal admissibility of electronic signatures. Furthermore, it will enable us to modernise the statute book by allowing the Government to amend references to paper signatures, documents, records and formalities such as sealing or witnessing to include electronic equivalents.
	The Bill is the result of an extensive process of consultation with business and the IT industry and the Government have made extensive changes to the policy inherited from the previous administration. This process of consultation has resulted in a genuine partnership in this area between government and industry. Indeed, as I shall explain, the Government hope to see many of the Bill's objectives achieved by self-regulation to the extent that we hope that we shall not need to bring Part I into force.
	The first aim of the Electronic Communications Bill is to build trust among consumers and business in the providers of cryptography services. There is widespread agreement of the need for a kitemark so that consumers and businesses can have trust in the providers of those services. Such services allow users to verify who has sent an e-mail, to have confidence that their messages will not be altered en route and to have confidence that their commercial information or credit card details will be kept secret.
	Part I provides statutory back-up to a voluntary, self-regulatory scheme of trust service providers. The Government are working with the Alliance for Electronic Business, which is drawing up a self-regulatory approvals scheme, known as the T Scheme, to ensure minimum standards of quality and service.
	When the Government consulted on the draft Bill in July 1999, we spelt out the criteria which we believe such a scheme should meet. Those include the need for a broad coverage of industry sectors and range of services, consumer representation, clear standards, the ability to ensure compliance and the ability to meet EU standards so that British businesses and consumers can take advantage of the single market.
	The Government's strong preference is for self-regulation, with the statutory powers in Part I held in reserve in case self-regulation fails. The Government are confident that if the Alliance for Electronic Business delivers what it currently plans to deliver, we shall not need to bring Part I into force.
	We believe that self-regulation will work. However, this is an extraordinarily fast-moving area, and the T Scheme is not yet operational. It would be thoroughly irresponsible to abandon now the possibility that we shall need a statutory scheme in future. Instead, the sensible course is to work with industry on self-regulation, while creating a statutory default option. After Royal Assent we would hold Part I in reserve in case self-regulation fails. We would then conduct an open review in 2004 of how self-regulation was working. Provided it was working well, these powers would lapse within five years under the sunset clause--Clause 15.
	In view of our preference for self-regulation, the Delegated Powers and Deregulation Committee has suggested that the House might consider amending the Bill to make the commencement of this part subject to the affirmative procedure. Having considered carefully the committee's views in this area, the Government have reflected on their position and I shall table amendments to meet that recommendation.
	Part II of the Bill confirms the legal admissibility of electronic signatures. It would give Ministers the powers to update the statute book by providing electronic equivalents to paper signatures, records and documents. Lawyers argue about whether or not electronic signatures would be recognised as valid by the courts. We cannot afford to wait while lawyers argue and courts decide. Instead, Clause 7 will allow business and consumers to have confidence in electronic signatures. It puts beyond doubt that a court can admit evidence of an electronic signature and a certificate in support of a signature, not only for the purpose of establishing who the communication came from, but also in establishing the date and time it was sent and in some cases whether it was intended to have legal effect.
	These measures have been widely welcomed by industry. For example, Intel said that it was,
	"delighted that government ... is focusing on the real issue of legal recognition of electronic signatures which will give a vital boost to business and consumer confidence".
	John Browning, co-founder of First Tuesday, Europe's leading meeting place for people, money and ideas in new media and e-commerce, said:
	"Creating a regulatory environment that makes the electronic realm at least as consistent, predictable and trustworthy as the physical one is the most important thing Government can do to promote the new generation of internet entrepreneurs transforming Britain's economy--and the world's".
	Through Clause 7, where there are no specific statutory requirements as to form, the vast majority of contracts will be able to be carried out electronically. There are other cases, estimated to be as many as 40,000, where specific legal barriers exist to completing tasks electronically. They include barriers to electronic transactions between citizens and government, and between businesses, other organisations, citizens and third parties.
	Clause 8 would give the Government and the Scottish administration the power to sweep away obstacles in existing laws which insist on the use of paper and formalities such as sealing, wherever it makes sense to do so, in order to give people the electronic option. This is a wide-ranging power but the Government believe that using secondary legislation to undertake the required modernisation is the most sensible way to proceed. The alternative of proceeding by separate primary legislation would waste valuable parliamentary time and was overwhelmingly rejected in consultation. On the other hand, allowing an electronic alternative across the board would risk creating uncertainty and confusion in those cases where the electronic alternative to a paper process was not obvious. I am glad that the Delegated Powers and Deregulation Committee was convinced by our arguments for proceeding in this way.
	I am also pleased to inform the House of two early uses of this power, assuming parliamentary consent. We are consulting on a draft order to use the power to allow requirements of the Companies Act, such as incorporation, shareholder communications and the appointment of proxies, to be met electronically. The noble and learned Lord the Lord Chancellor would use the power to allow conveyancing to be carried out electronically. He expects to publish draft orders for consultation later in the year.
	The Bill also modernises the out-dated system for modifying telecommunications licences. It is widely agreed that the current licence modification procedure requires urgent revision. A system devised at the time of privatisation to deal with a handful of telecoms companies has become swamped in today's market of hundreds of licensees. The current system requires the Director-General of Telecommunications to gain the written consent of all relevant licensees or to refer his proposals to the Competition Commission before proceeding with a licence modification.
	The Bill puts in place a more efficient procedure. The director-general would be able to make fast-track licence modifications, without reference to the Competition Commission, in cases where either no relevant licensees actively object to the pay modification, or where a modification is deregulatory according to stringent criteria. These proposals would allow the fair and efficient development of telecoms licences and facilitate effective regulation of the telecoms industry.
	Finally, I turn to the controversial issue of key escrow. That is the proposal that users of encryption should be required to deposit copies of the keys which protect confidential data with a third party. The Government have listened carefully to the views of business. The Performance and Innovation Unit study, published on 26th May last year, confirmed that partnership with industry, rather than mandatory key escrow, was the best way to meet law enforcement concerns. We have now written that policy on to the face of the Bill through Clause 13, which explicitly prohibits key escrow requirements.
	It is fitting that this Bill is likely to be one of Britain's first 21st century laws. It would provide a sound legal basis for electronic commerce and electronic government, and it would help to build consumer confidence in buying on the Internet. It is a modernising Bill, which would bring the statute book in line with modern technology. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.--(Lord Sainsbury of Turville.)

Baroness Buscombe: My Lords, I rise to speak to this Bill with some pleasure: pleasure that we have already achieved a great deal in another place in our determination to simplify the proposed legislation and ensure a light touch; and, further, that we have today an opportunity to address an exciting, fast-moving subject that is already impacting upon our culture and our thinking.
	It is often said that if you stand still you will fall behind. With information technology you need to be on the run. Electronic commerce--the commercial application of IT--has already transformed the way that many companies do business. It provides access to larger markets, reduced operating costs and opportunities for customised marketing. Moreover, it is having a significant impact upon job creation worldwide. There are enormous potential benefits for the consumer, including increased consumer choice, lower prices and improved customer care. E-commerce's key to success in the global market rests upon its ability to compete, both in terms of cost and speed of delivery. There is no doubt that progress so far has been prodigious because the IT industry has been allowed to develop unfettered by rules and regulations. Thus far, it is a tribute to what we on these Benches mean by free enterprise.
	Attempts to legislate on Internet matters are almost bound to fail at both national and European level because the market-place is global and "location" as such has become, for the most part, irrelevant. The Internet is capable of creating an important shift of power from government to the individual. That is bad news for the politicians and, in particular, those who hold the purse strings of government. Governments will attempt to arrest that. However, they may do so at their peril, since the change that has already taken place in a business's ability to communicate and contract across the globe means that it must be able to compete if it is to survive in the market- place.
	That said, we on these Benches accept that there needs to be a framework within which all users can feel confident that, however they choose to interact or interface with electronic commerce, they are able to do so in a secure environment. In that context, governments can give limited assistance for the growth of e-commerce in three ways: first, by setting up recognised and certified systems for electronic signatures; secondly, by removing barriers to e-commerce and making it possible for any type of contract or transaction to be concluded over the Internet; and, thirdly, by providing a clear legal framework for e- commerce. That means responding where the current law fails to meet the needs of the user in an Internet context. For example, keeping the Internet free of fraud will require a change to the current legal principle that it is not possible to defraud a computer.
	In the experience of those on these Benches, in consultation both with IT companies and with business, there are currently three major concerns in relation to locating electronic commerce activities: taxation, cross-jurisdictional transactions and an adequate resource of computer skills. In essence, a favourable tax regime, coupled with access to appropriate skills and the freedom to contract internationally, are key.
	More interference by government than that and we run the risk of discouraging an industry, particularly business from outside the United Kingdom, from participating in electronic commerce in the United Kingdom. The Electronic Communications Bill does not deal with any of those issues. However, the Government need to address them, particularly in the light of what is already happening in Brussels. There is no doubt that, once again, we are witnessing ill-thought-through and confusing bureaucracy that will place increased burdens on business and could seriously hinder the growth of e-commerce across the EU. Consideration of the Electronic Communications Bill cannot take place in isolation without reference to laws which are impinging, and will impinge, upon the ability to effect and develop e-commerce here in the United Kingdom.
	Let us take, for example, Article 15 of the draft regulations replacing the Brussels and Rome Conventions which will give consumers the right to sue an e-commerce provider in the consumer's own home courts. How will that sit with the draft directive on legal aspects of e- commerce? This directive applies the single market "country of origin" principle whereby service providers are regulated in the member state in which they have their main place of residence.
	The net effect of this proposal would be to require someone doing business via the Internet to comply with 15 different sets of laws--indeed, 25 if enlargement goes ahead--in direct contravention to the home country control principle. In short, that is a mess and the Government need to put pressure on our EU partners to sort it out; otherwise many businesses, and in particular small and medium-sized enterprises, may well not bother with e-commerce at all as the risks will simply be too great.
	I turn to the Bill itself. Part I establishes a part- statutory, part-voluntary register of Internet service providers. That remains a concern. We believe that the industry is best equipped to set standards and that it can be relied upon to do so without government interference. To that end, we would like to see the five-year term for the sunset clause significantly reduced.
	With reference to Part II of the Bill, thanks to considerable pressure from both the IT industry and the Conservative Party during its passage in another place, it is now in much better shape to deliver all that we want to see in this Bill; that is, the establishment of a proper legal framework within which a person can contract with another and that the contract will stand up in law.
	We are, however, proposing at Committee stage to consider further the status of an electronic signature as against a digital signature. We are concerned, for example, that the definition of an electronic signature under Clause 7(2) does not follow the definition in the European Electronic Signature Directive. In particular, there is no requirement that an electronic signature should have a personal element, nor that it should indicate approval of the data signed. In fact what is currently defined is more akin to a digital signature. I should like to know whether the Minister thinks that that matters.
	Having listened to the Conservative Party and dropped the original Part III, which would have given law-enforcement agencies draconian new powers to demand the unscrambling of intercepted emails, the current Part III is a bolt-on extra. It provides a retrospective amendment to the telecommunications licence law. We believe that that part of the Bill must be watched closely to ensure, in particular, that there is no inequity among existing telecommunications licence holders.
	In conclusion, our belief is that the Bill should be as light of touch as possible. It should act as a signal to the business world that the Government will not needlessly interfere, thereby leaving e-commerce to flourish for the benefit of all. An encouraging statement made by the e-Minister, Patricia Hewitt, in another place is worth noting. She said:
	"I hope to see many of the Bill's objectives being achieved by selfregulation, so that we will not need to commence Part I".
	I very much hope that that approach will be sustained through the passage of the Bill in your Lordships' House and well beyond.

Lord Sharman: My Lords, I am pleased to welcome this Bill as a valuable step forward in the promotion of e-commerce in this country. It states as its aim removing barriers and facilitating the adoption of e-commerce in the UK.
	I am pleased to note the significant public consultation which took place in relation to the matter. That was widely welcomed by the industry. A number of concerns that arose from that have been addressed. In particular, I am pleased to see the removal of the key escrow provisions from the original Bill and the investigation and disclosure requirements, although I believe that we shall need to revisit that should those provisions appear later in the investigatory powers Bill.
	I submit that, as enabling legislation, it is a light touch on the tiller. I like the idea of the voluntary code which is envisaged, known as the T Scheme. I believe that that is critically important in the development of e-commerce, particularly in view of the speed at which things move. I have said on previous occasions in this House that it will be difficult, if not impossible, for the legislative process to keep up with the speed of developments regarding the Internet. In that regard, it is interesting to note the new term that I became aware of relatively recently which is used extensively in net-based and web-based matters; that is, "dog years". It is based on the notion that when considering developments in technology, one should take one-seventh of the normal timespan in which something would develop and use that as a guideline. That means that we need to act with speed. Voluntary codes must be made to work to see us through that process.
	I am pleased that not too much is proscribed in the Bill. The Internet is more than just a faster and more convenient way of conducting commercial transactions. It is not just a digital mirror of the conventional world, which many people suppose it to be; it is not just another channel of communication, nor another technology like TV or radio. There are many--I count myself among them--who believe that this may be the most profound agent for change in social and economic spheres in our lifetime.
	The Internet is not essentially about computers; it is about the way that people use and interact with computers; it is about a new way of life. I see the Internet as being a force for change in five ways. First, it immediately overcomes the barriers of distance; distance is no longer relevant. Secondly, it brings buyers and sellers together immediately and one must therefore consider what will happen to the function of intermediaries, which are so much a part of many economies. Thirdly, it puts people on a level playing field, regardless of their status as either multinational corporations or single individuals. Fourthly, it enables complex alliances and gatherings of people to form spontaneously. Fifthly, it is the avenue through which ideas and knowledge can be made freely available. It is a powerful force for change.
	A number of issues arise in relation to the Internet which, of necessity, could not be addressed in this Bill. We must ensure that what results from the development of the Internet is not a new divide--a digital divide, as opposed to a social or a class divide--between those who have access and those who do not. That may be due to age or inclination, but it is an issue that the Government must keep at the forefront of their mind.
	How do we make access as widely available as possible? It may be through schemes involving terminals for hire, help with phone calls--in that regard the issue of metered phone calls will be critical--or in the further development of computers for schools. In that regard, I do not mean where computers simply sit in computer rooms to enable computer science to be taught, but where they become an integral part of the whole education process. Access may be created through schemes involving training for all people, which is clearly important. It may be necessary to encourage further places of public access. We already have cyber cafes; we could also have access in libraries and so forth.
	The e-commerce revolution is happening today. It is moving at a speed which terrifies most of us in business. IT skills are critical and speed is of the essence. I welcome the Bill; I support it. It strikes the right balance between enabling legislation and voluntary regulation or voluntary schemes that can move at the necessary speed.

The Earl of Erroll: My Lords, I welcome this Bill as a move in the right direction. The big problem with the Internet is that people can conceal their identities. It is important to know with whom one is communicating. From that point of view electronic or digital signatures are vital. They will give people confidence that they are doing business with the right party.
	One anxiety about which I have received briefing is that the timing of the implementation of some of the provisions is being left to Ministers and they could therefore be implemented piecemeal. I cannot understand why we cannot make a blanket change and say that, given the right electronic signature and so forth, electronic documents will be as admissible as written documents with exemptions for certain vital classes. Why should it be necessary to amend around 45,000 different references to the written word, which would take a parliamentary lifetime? The real worry is that inertia will defeat the objective and, if we do not jump in with both feet, at the end of the day we will be left behind.
	The whole issue revolves around the confidence of knowing with whom one is dealing and that to enter into a contract with them means that the contract will be binding. So the next stage must involve the legal admissibility of electronic documents. I understand that to be properly dealt with in the Bill. I am not a lawyer and I have not studied the matter in great detail. But I welcome the fact that the Government will not have total access to people's communications. They do not at present and there is no reason why they should just because we are going electronic. The fact that they cannot keep the key escrow is very powerful.
	If the Internet is going to grow there should be minimum regulation. We cannot regulate in a vacuum; we cannot even regulate at a European level. There are no boundaries for the Internet. One of the great things about it is that it is possible to do business anywhere. One can, if one wishes, put one's website on a server sitting on the other side of the globe in a country that is not regulated. The great strength of the Bill therefore is that it does not try to do too much. It alights on one problem and tries to resolve that. From that point of view, people must have confidence that the self-regulatory scheme will work. If it does not, the Government must be ready to act swiftly. If people's electronic signatures are discredited, then doing business over the Internet will be discredited.
	I am glad that the Bill does not regulate such things as personal data and their storage. They will probably be covered by the data protection Acts, which may not be as strong in other jurisdictions but, after all, we do not have to give our personal data if we do not want to. We can always opt out. The Internet does not force people to do anything; it is a facilitator. The Government need to introduce legislation which facilitates use of the Internet, makes it advantageous to use it and does not put people off using it. This Bill is the first step in the right direction of helping to facilitate Internet business.

Baroness Dean of Thornton-le-Fylde: My Lords, first, I declare an interest as a member of PITCOM and of EURIM, but that does not mean that I support all their policies in this specific area of work.
	When reading the papers for the debate this evening, my mind kept going back to the late Lord Chelmsford from the Benches opposite. He brought great expertise to our discussions in this whole field of developing communications and the changing of our lives electronically. I am sure that we shall miss his major contribution in our debate this evening.
	I too welcome the Bill. In fact, much of the correspondence I received was in support of the Bill. There were perhaps a few "ifs" and "maybes", but the general impression is that this Bill is urgently needed; it is well placed in this area of e-commerce and we must get on with it. Although the Bill has such major support, some reservations have been expressed. I do not share any of those reservations because the Bill is written is such a way as to have a "light touch", which will enable us to deal with such situations.
	The key point about the Bill is that it recognises that this is a tremendous opportunity for us. It is not just about electronic commerce; this is one of the spin-offs of the whole world of electronics and is presenting us with great opportunities. I know that we are basically dealing with the business element here, but we should also recognise the social changes that it is bringing about in our community. Indeed, it is a new language in its own right. You can sit round a table talking and someone may mention a new word from that language. Everyone sitting there will nod his or her head, but I am not so sure that everyone understands the new terminology. I include myself in that group.
	The impact of electronic commerce on business will be enormous. If I want to buy a car in the future, I may well decide not to visit a car showroom; I may just put my request on the website and ask who is bidding. I may then choose the lowest bid. At present, you can actually buy holidays, and so on, by an auction that is provider-led. But this could well become consumer-led. Indeed, the whole concept opens up all these opportunities.
	We see that the young are not put off by any of this new technology. Indeed, they tutor their parents on how to access websites, and so on. I am sure that many parents who trust the system enough at present to buy things on the web--there are too few of them--have been shown how to get on to the system by their children. There is also the development of that wonderful term "silver surfers". The whole concept spans all the ages and presents us with tremendous opportunities.
	I enjoyed the contribution made by the noble Lord, Lord Sharman. He rightly said that this is a global business, whether it be buying or talking; indeed, the BT slogan "It's good to talk" is true. But this is a different way of talking: it is about families connecting all over the world, as though they in the same room. Eventually, of course, with further investment they will feel as if they are in the same room with video links.
	The Bill is crucial to the speed of development. I may be wrong, but I actually believe that we are only--to use the vernacular--in the "foothills" of the possibilities that face us in the future in this area. Therefore, no traditional, statutory framework will suit it. However, that does not mean that the traditional values will not; indeed, I suggest that they will. When I talk about "values", I mean those of the "consumer"--a word which, unfortunately, has not been sufficiently used in debates on this subject. The consumer expects an honest deal. After making a purchase, he expects to receive the goods that he believed he had purchased.
	In my view, the Bill reflects that "light touch, technology neutral" approach. If the legislation had been much firmer, it could well have proved to be out of date before it was signed, even if it is due to be signed in a different way from that which generally applies to Bills. As I said, there are enormous opportunities, but we cannot kid ourselves that there are no dangers involved. We have all read reports about money laundering, drugs and, indeed, the downside of this electronic world, including paedophile pornography. That is extremely damaging not only to those involved, but also to our society at large. We must somehow find a way to deal with that aspect.
	I go along with the view that self-regulation is probably the right way forward for this kind of development. However, I shall not concentrate this evening on such potential risks, serious though they are. I agree with my honourable friend the Minister in another place who said:
	"The first aim of the . . . Bill is to build trust among consumers and businesses in the providers of trust services".--[Official Report, Commons, 29/11/99; col. 43.]
	Certainly, consumer trust is essential. At the time that the Bill was going through another place, there were discussions with the Alliance for Electronic Business to develop a self-regulation approval scheme. This would be on the basis that the Government would set the public policy objectives and the industry would deliver solutions through self-regulation--perhaps by a kite-mark.
	I believe that such safeguards are needed. The industry has sought the opportunity to provide self-regulation and, therefore, it is essential that it should deliver. Indeed, over the past few weeks we have seen the London Evening Standard starting to highlight some of the potential problems for consumers. It has set up an online system of "e-whinge@standard.co.uk". I shall not name the companies that the public have actually gone online to complain about because they have not received the service or the goods that they thought they were ordering; and, indeed, for which they had paid online. It is just a window of what could happen if the industry does not deliver that self-regulation.
	I was therefore delighted to see, and I very much welcome, the launch of Trust UK, in which my noble friend Lord Borrie is involved. It gives me confidence to know that someone of his experience and knowledge is involved in this project. I certainly wish it well. It has been set up as a government initiative but will mean that the Alliance for Electronic Business and the Consumers' Association will be working together. They will provide a code of practice for businesses for trading on the Internet. That has to be the way forward. I believe that there were about 200 people at that launch, most of whom represented organisations. If I read out the names of those organisations, I am sure that noble Lords would recognise them as household names. They include the Financial Times, the Royal Mail, British Telecom, ICL, as well as others, including Microsoft--that international company with a very dominant role in the market.
	I have a question for my noble friend the Minister. It concerns something regarding notaries groups that I came across while I was reading the briefing for this debate. Apparently, they receive their terms from the Archbishop of Canterbury, although I have never heard this before. They have a role in signing off certain legal elements within the system. Of course, this has quite an impact. My noble friend may not be able to answer this question this evening; indeed, I should certainly be content if I did not receive an answer tonight. Nevertheless, the question needs to be raised. Are these people going to be involved in the work of Trust UK?
	The banks, which will be crucial in the process, are certainly supporting it. However, it is interesting to note that, in parallel, they feel that perhaps an organisation called Indentrus (which is the global framework for trust services based on inter-bank co-operation) may well be more effective because it is a global impact organisation. There is also the view that cryptography, as we know it, may not provide the high-level security that may be needed for some of the trading online within a time-span of five years. When I read that wording, I thought that it was all gobbledegook, but I think I now understand it. It clearly demonstrates the language that is developing in this whole area.
	Finally, I believe that the Government are right to hold statutory powers in reserve in case self-regulation fails. It shows that they are serious about consumer protection. However, I think that the sunset clause should give assurance to the industry that, if it delivers effective self-regulation, there will not be a need for statutory regulation. As noble Lords have probably gathered, I welcome the Bill; indeed, I am an enthusiast for this whole area. It provides us with a tremendous opportunity. If we have a debate on this in 10 years' time, I am sure that we will have moved on considerably in an area that is changing the very nature of the world in which we live.

Baroness Anelay of St Johns: My Lords, I hesitated before I put down my name to take part in this Second Reading debate. I did so simply because I consider myself to be an amateur--indeed, a silver surfer--but an enthusiastic user of electronic communications. I do not understand how they work, but I am jolly glad that they do. I am most grateful to the noble Baroness, Lady Dean, for the very kind comments that she made this evening with regard to Lord Chelmsford for the work that he did for EURIM. I still think of him as my noble friend, even though he is no longer with us in this House or, indeed, alive. Indeed, he recruited me as a member of that body hardly before I had sat on these Benches more than a day or two. He was an enthusiastic recruiter.
	It occurred to me that this Bill will have an effect on every enthusiast, or on anyone who at the moment has no idea that he or she will become a user of electronic communications. It seems at the moment that every time one picks up a newspaper one is assailed with stories of the Internet and with e-commerce and e-communications stories all jumbled up together, so that when the public see the prefix "e", they believe that e-commerce is being referred to. The climate is different to that of three years ago in which the previous government framed their proposals. E-transactions were then still very much in their infancy. It is right that the Bill should recognise that changed climate.
	When I read the briefing of various organisations before today's debate it became clear to me that forecasts of how e-communications will develop are as many and as varied as the experts who are ready to give their advice. Tonight the noble Lord, Lord Sharman, said that things move at a stunningly rapid pace and mentioned "dog years". As David Williams of Morgan Stanley put it last week,
	"Three months is the equivalent of an Internet year".
	However, perhaps one thing the experts can agree on is that, whatever the pace, it is fairly rapid.
	What is the e-world in which this Bill will operate? New products are being rolled out at an amazingly rapid pace. In the past two weeks there has been a flurry of announcements from Abbey National, Barclays, Halifax and Lloyds TSB. On Thursday Abbey said that it planned to launch a net bank with venture capital support and would double its e-commerce spending to £200 million next year. The financial pundits have forecast that tomorrow more plans will be announced by the Pru regarding the future of Egg, its net bank. I can mention those companies because I am not a customer of either and therefore I have no interest to declare.
	As such plans race ahead, there is also no stopping the online shoppers, to whom reference has been made this evening. This growth has occurred despite all the fraud scare stories, the odd hacker attack and sporadically incompetent retailers. According to the latest research by experts at NOP it is estimated that Britons alone will spend more than £10 billion online this year. That is a massive amount when one considers that we spent only about £3.2 billion last year, and less than £500 million the previous year. It is no wonder that almost every television advert that we see these days is Internet related.
	A presence on the web is no longer a luxury or merely an eye-catching marketing tool for business; it is a necessity for those who want to keep pace in today's increasingly global commercial environment. But the kind of e-commerce that we hear about is simply the tip of the iceberg. The unseen, as yet uncelebrated, use of the net should be about moving core business processes online and re-engineering the way they work. However, many companies have delayed their e-business plans because of their security worries. I note that the not-for-profit IT organisation, InterForum, in its report Electronic Signatures--Signing up to the Digital Economy, states,
	"According to figures from an NOP survey, while 76% of large British companies use the net and 76% have websites, 71% of large companies in Britain do not use the net to send confidential or sensitive information. To leverage its immense potential, the net needs to become a safe and trustworthy medium for even the most valuable and sensitive of transactions".
	That is why I, like my noble friend Lady Buscombe, welcome the Bill as a step in the right direction in ensuring that transactions over the net are safe.
	How will the Bill make matters any better for users and providers of e-communications? I had intended to give an almost unqualified welcome to Part II of the Bill but having heard what my noble friend said earlier with regard to electronic signatures, I have a few qualms. On reading the Bill beforehand I had expected that it would provide that electronic signatures would be used only where a handwritten alternative was already provided for, and that the electronic signature would tie the message and the information to the person who had sent it so that one could prove who had sent it and verify the integrity of the information. On that basis I thought that the measure was an excellent move forward. However, having heard the comments of my noble friend Lady Buscombe, I should be grateful if the Minister would reassure the House with regard to the query about digital signatures and electronic signatures.
	After all, the advent of electronic signatures and other technical advances all promise to make it safer to do business on the web. I am certainly aware that public bodies are planning to use electronic signatures and other public key infrastructure [PKI] technologies to push forward what they can do over the web. I was intrigued to hear the Minister mention that conveyancing would soon be put on the web. I look forward to seeing how that will operate.
	Will the Minister tell the House whether the trials that are under way at Customs and Excise to establish the feasibility of filing VAT returns and making VAT payments over the net are progressing satisfactorily? Is there any information at this early stage on whether that business will be transferred to the web? If that is the case, I believe that businesses would welcome it as a way of ensuring that their returns have been received. They will not need to re-enter data and they will be able to hold on to their money for longer without risking late payment penalties. That subject is always of interest to businesses, particularly to small businesses.
	Like my noble friend Lady Buscombe, I have some concerns about Part I of the Bill. I listened carefully to the Minister's introduction of the Bill. I look forward to examining those issues further in Committee. The Minister referred to the Select Committee's report and its recommendations with regard to Parts I and III. The noble Lord said that the Government would be prepared to accept some of the committee's recommendations. I hope that in Committee we shall have the opportunity to examine carefully all of the committee's recommendations. I hope that we can persuade the Government to accept all of the recommendations rather than just some of them.
	Many noble Lords have said tonight that this Bill operates in a light touch atmosphere, one where extra regulation is introduced but may be welcomed. I welcome that light touch. I hope that anything that we do in Committee will maintain that light touch rather than seek to add additional regulation.

Lord St John of Bletso: My Lords, I, too, welcome the Bill. I endorse the welcome for the Government's light touch approach and preference for self-regulation in this matter. I declare an interest as a director of an Internet solutions provider which provides both Internet connectivity and sophisticated Internet solutions for business. In my capacity of having run that company in the West End I can certainly bear witness to the extraordinary growth in the use of electronic commerce, particularly in the business-to-business market. The Internet may be full of uncertainties, but one area of agreement among industry pundits and executives is that the volume of businesses buying online will soon dwarf purchases by consumers. There is no doubt that electronic networks are dramatically changing the modus operandi of our corporate culture. I recall the speech made last year by the chief executive of Intel when he remarked that any company which does not transform itself into an Internet company in the next five years will not be a company. Perhaps that is a bit far fetched, but the pace of transformation is staggering as the world becomes ever more a global village.
	While the United Kingdom and Europe have arguably been leading the development of new Internet technologies, I have certainly noticed that United Kingdom businesses are in many cases almost two years behind American companies in their appreciation of what the Internet can do for them. I totally agreed with the noble Baroness, Lady Dean, when she commented on many of the terms that are often referred to.
	One of the roles of our company is to educate businesses as to the value of co-location, webstreaming, webcasting, virtual private networks, facilities management and of course the whole wide range of e-commerce solutions. Last year the trend in the industry was the race to establish dot.coms and portals. This year the focus has shifted to application service providers, WAP and enabling technologies, including the need to embrace and promote electronic commerce, which many refer to as "the holy grail of the Internet".
	When this Bill was debated in another place, several Members expressed their concerns about the impediments in the United Kingdom to online shopping, both through the cost of installing a PC at home and the comparatively high costs of connectivity to the local loop. I am sure that many would have welcomed the Chancellor's recent pledge to reduce the costs of connectivity to the net.
	The noble Lord, Lord Sharman, referred to the speed of developments in the Internet. While referring to PCs, I would draw attention to non-PC devices such as mobile phones. These are expected to out-sell PCs by 2002. The forecast is that they will outsell them by a factor of 10 to one by 2010. Within the next two years it is predicted that more people will be accessing the Internet through mobile telephones than through PCs. In the future a major part of personal communications, be it voice, data, images or video, will be wireless. The third generation technology developments anticipated in a few years' time will enable users of cellular devices to surf wherever they are, with wireless commerce set to soar.
	The growth of e-business is being driven by several factors, including more intelligent software and technologies, an increase of e-business outsourcing, growing business sophistication on the Internet and of course the trickle-down effect of very large companies moving to web-based procurement systems.
	I totally agree with the e-commerce Minister, Patricia Hewitt, in her foreword to the InterForum White Paper on electronic signatures when she said:
	"one of the challenges for industry is to present the new technologies in such a way that electronic commerce is understood by both business and the public".
	Certainly the key to the success of electronic commerce is the necessity to ensure trust and confidence in this medium. Many recent reports confirmed both public and business concerns regarding the confidentiality and security of transactions made online. There is clearly a strong case for advanced authentification strategies in the light of the explosive growth in e-commerce, particularly in view of the trend in the United States and the forecast of the growth of e-commerce in Europe.
	It is a well-known fact that online criminals have targeted victims through fraudulent billing of credit card numbers. Visa International recently reported that while the Internet generates only 2 per cent of its credit card business, e-commerce accounts for roughly 50 per cent of discovered fraud and billing disputes. Obviously a major part of that percentage concerns billing disputes rather than fraud, but it is still a staggering figure. Identity theft, when criminals assume their victims' identities to obtain credit cards and loans in their name and pillage their bank accounts, is another type of online fraud that is also proliferating. A skilled hacker can in many cases access a company's client database to obtain customer records and use this information to order credit cards or apply for loans in other people's names. I therefore totally agree that there is a strongly demonstrated need to protect individuals and corporations from these so-called cyber bandits.
	I would again draw reference to the White Paper on electronic signatures, which aptly summarised the position when it said:
	"To truly leverage its immense potential, the Internet needs to become a safe and trustworthy medium for even the most valuable and sensitive of transactions. What is needed is a mechanism to guarantee the integrity of information and provide relationships of trust that are the foundations of a commercial infrastructure".
	While I am inherently suspicious of regulating electronic commerce, I wholeheartedly support the objectives of this Bill, although I have reservations about Part I. I certainly hope that, in the words of the Minister, a market framework is built which creates trust in the authenticity, confidentiality and security of online transactions and confirms the legal validity of online transactions and electronic signatures. Ultimately, though, I believe in co-regulation, with the Government defining public policy objectives and the industry delivering solutions through self-regulation. I am pleased that the Government appear to support this policy, and therefore wish this Bill a speedy passage through your Lordships' House.

Lord Evans of Watford: My Lords, may I first declare an interest as a director of an online company. I am delighted to welcome the Bill. It will give important assistance, reassurance and safety to the rapidly growing world of electronic commerce and communications. It is certainly vital to Britain's future economic well-being and is especially important as Britain has already secured a leading position, if not the leading position, in Europe.
	I am especially pleased that the Government have adopted a "light touch" approach to the many thorny issues that surround this new and as yet only partially understood area of business activity. I say "only partially understood" because we cannot yet be sure how the arrival of instantaneous network communication will affect business methods, organisational procedures and the social life of this country.
	Although the Internet and similar digital communication technologies have been in widespread use for around 10 years, we cannot yet know how society will adapt to such technologies, nor can we know the implications of such use that may emerge. One thing has become clear, however. The rate of change in our society has increased once again, perhaps to a degree it is still hard fully to appreciate.
	Change in the Internet world is moving so fast that our existing mechanisms of lawmaking will not be able to respond quickly enough to regulate such activity in a timely way. It is for that central reason that I welcome the fact that in this Bill it is the framework and not the detail that is laid before us. In the Government's subsequent deliberations on topics which are not covered by the Bill--I refer to such issues as law enforcement agency access to encrypted communications and the right of citizens to absolute privacy in electronic communications--it will be helpful to remember that present legislative procedures are unable to keep up with the developments occurring in the digital world. This may require the Government to introduce broad-based legislation which gives Ministers of the Crown greater freedom to adjust electronic communications regulations.
	Lest my comments be conceived as a proposal to weaken the democratic process, perhaps I may make it clear that any such powers devolved to Ministers and departments must be limited and, where appropriate, should be subject to retrospective review by both Houses. But some way must be found to allow government and departments to keep up with the developments of the Internet age. Our present legislative processes are woefully inadequate in a domain which is global, low-cost and moving at the speed of light.
	Despite such an apparent challenge to our governmental processes, I wish to return to the contentious issues of unbreakable encryption and methods of providing lawful access to such encrypted material by our various law enforcement agencies. Along with other noble Lords, I was last year shown samples of a wide range of shocking material which is currently transmitted via public digital networks and which can only be described here as criminal in nature. In common with all other responsible citizens, I wish to support methods for the police and other security services to detect, hunt down and prosecute paedophiles, terrorists, drug wholesalers, currency counterfeiters and other criminal groups which are already taking advantage of strong digital encryption techniques to hide their activities.
	I must make it clear that I believe Britain's future economic health is dependent on strong, unbreakable encryption techniques being freely available to lawful users without fear of government restriction, routine surveillance or any form of monitoring. In the future, the majority of business communications will obviously be digital and, as the degree of active, competitive, economic monitoring, analysis and commercial spying inevitably increases, business leaders operating within the UK must be certain that they can communicate lawfully in such a way that no law enforcement agency or other security service can intercept and interpret their lawful but highly sensitive communications without a court order. Such a freedom remains at the heart of our democracy and it will be central to our economic well-being.
	Having presented that warning about issues which have been removed from the Bill and which are due to be presented on another occasion and having proposed that some mechanism for updating legislative detail without constant return to both Houses may need to be devised, I am extremely pleased to commend this excellent Bill to your Lordships.

Lord Blackwell: My Lords, I, too, should declare an interest as an executive of a financial institution which is a member of a number of schemes which issue digital signatures and certificates.
	I spoke in the debate last autumn on the gracious Address to welcome the promise of the Bill. Like other speakers, I welcome it again this evening. I said at that time that the impact of electronic commerce in revolutionising industry and commerce in this country was not well understood. Despite the publicity given to the dot.com revolution since then, that is still true. In particular, outside the House and the debate, there is not as yet a full understanding of the extent to which e-commerce and the Internet revolution will impact on major established corporations--those with established customer bases, brands and manufacturing processes--and the extent to which the changing interface with the customer will affect not only the customer but will have an impact all the way through the business system in terms of procurement and processing systems, with data passing through from one side to another, hardly touching the sides. It is that potential of e- commerce and the wealth creation and productivity improvements that lie behind it which are so important to the success of the Bill, as the Government and the Minister have recognised.
	While welcoming the Bill, I should like to raise one or two queries regarding interpretation which it would be helpful to clarify during the course of its passage. The first relates to liabilities associated with the use of digital signatures under Clause 7; in particular, the question of who bears liability if a digital signature is accepted in good faith as evidence of a transaction and subsequently the authenticity or appropriateness of the signature is contested. The security around digital signatures could fail for one of two reasons: first, there is the possibility that the certification process of the person named as the holder of the signature may fail; the person who issues the certificate may fail to carry out adequate checks or to satisfactorily identify the bona fides, so certificates may be issued which are not backed up by the true identity of the person seeking to enter into the transaction.
	The second reason concerns the security of the encryption and coding systems. The possibility of criminal elements attempting to keep one step ahead of encryption technology has been mentioned. I should not want to cast any doubts on the robustness of the encryption and security techniques being developed, but we are all well aware that it will be seen as a challenge to find ways around them. It is inevitable that those techniques will have to continue to evolve levels of sophistication to keep one step ahead. There will be additional challenges as encryption and signatures move into mobile telephony. As has been mentioned, the mobile world is likely to be a major area of use of digital transactions. Another factor will be the increasing use of smart cards as carriers of digital signatures, which will provide some additional elements of security but at the same time will create some new points of vulnerability as people find ways of reading the codes on cards through one means or another.
	Therefore, we must accept that there will be cases where digital signatures accepted in good faith will turn out to be contested on the grounds either that someone has intervened fraudulently or that the certification itself has turned out to be inadequate. My assumption is that the framework of law will recognise that those who accept signatures in good faith will have the right to claim against those who offer them digital signatures and that those individuals providing digital signatures will in turn have the right to claim against those who provided them with encryption systems and certificates. No doubt it is anticipated that different levels of guarantee will be provided by those providing digital certificates and those providing encryption systems to guarantee different levels of security for what they are offering. In that framework, protection will be given, liabilities will be provided and insurance taken out to ensure that claims may be met. The Bill does not relate only to the consumer world of smallish purchases over the net but also to the use of digital signatures and encryption techniques to protect commercial and financial market transactions which may run into not only millions but hundreds of millions of pounds.
	I believe that there is a presumption in the legislation. For example, paragraph 43 of the Explanatory Notes states that,
	"It will be for the court to decide in a particular case whether an electronic signature has been correctly used and what weight it should be given (e.g. in relation to the authentication or integrity of a message) against other evidence".
	As a non-lawyer, it would be helpful to me at least--and it may be helpful to others--as we go through the Bill to clarify exactly how the courts will interpret the liabilities for digital signatures and certificates and how that process will work.
	I should like to raise a second point. Like other noble Lords, I very much hope that it will remain a voluntary scheme, but if the Government find need to use Part I and keep a register of authorised certificate issuers, what liability might then fall on them? What will be their liability if they authenticate people who turn out not to be providing certificates of appropriate integrity or people who do not have appropriate checks behind them? If that part of the Bill were used, how would the Government deal with that liability or apparent liability?
	My third point concerns the Government's intention in accepting digital signatures for payments from organisations and citizens, both in terms of the use of digital signatures and certificates in government procurement and in the consumer sector with regard to the use of digital signatures on smart cards for benefit payments and tax payments. The Government can be a major force for change. The procedures and standards they seek to adopt in their own rules of engagement will set standards that will have an impact on the rest of the industry. It would be helpful to know what the Government plan in that area and how they will develop their behaviour.
	My fourth and final point concerns protection of information. I welcome the prohibition in the Bill. Equally, it would be helpful if the Government could clarify what, if any, ability the Government or government agencies have under the Bill to intrude on private information. Are there any circumstances or provisions under which that would be permissible?
	The points I have raised are points of clarity and not disagreement. Like other noble Lords, I wish the Bill a rapid passage through the House and look forward to it being on the statute book.

The Earl of Liverpool: My Lords, I rise to speak in this debate as one who embraces new technology and the positive good it can do for mankind. I enjoy the instant communication and access to information of all kinds as well as the ability to trade online. There seems to be no limit to the potential of this relatively new medium and its power is quite literally awesome.
	At this stage I should perhaps declare my only other interest. Like the noble Baroness, Lady Dean of Thornton-le-Fylde, I am a member of PITCOM. I should like to take this opportunity to thank her for her kind remarks about my late friend, Lord Chelmsford.
	We are living in an age where the speed of computer technology and the Internet are literally transforming the way we communicate and do business. It is, I believe, more significant, more far reaching and indeed more durable than the period of the Industrial Revolution, a point made by the Minister in his opening speech. Therefore, the legislative framework that we introduce to ensure order in this fast-moving world, while at the same time giving UK plc full entrepreneurial opportunities in this field, is of enormous significance.
	The Bill goes some way along that road and I therefore join other noble Lords in giving it my general support, although I am concerned about one or two aspects. The voluntary industry scheme--or T Scheme as it is called--does have its merits and it has the general support of the CBI, the British Bankers' Association and many others, but what worries me is that the Secretary of State has up to five years to introduce the framework of Part I of the Bill by statutory instrument. My concern in this regard is that, as I have already mentioned, technology is moving at a remarkable pace and indeed it is common for major hardware and software upgrades within the industry to take place at six-monthly intervals or even less.
	The scenario I invite noble Lords to consider is that if the Secretary of State deems it necessary to lay before Parliament a statutory instrument in, say, three or four years' time, the entire landscape will have been transformed from what it is today. Given that we simply cannot predict what e-business will look like in even two years' time, I am a little uneasy that the Bill does not allow for the approval scheme to be subject to formal consultation before its implementation. If that could be written into the Bill it would enable all interested parties to make state of the art contributions and ensure that Part I of the Bill met the then needs of customers and suppliers alike.
	I have heard it said that legislators should be likened to hedgehogs on the global super-highway because they tend to get run over and squashed! I am not saying that this creates a convincing argument for doing nothing, but it is important to recognise that it is indeed a global business and the technology exists to provide encryption services anywhere in the world. Many service providers have their servers located in countries other than the one in which they provide services. This could be a matter for concern because it might enable encryption service providers to claim immunity from T Scheme and United Kingdom legislation.
	I turn now to Clause 7, which is the heart of the Bill. Clause 7 gives legal recognition to electronic signatures. On the passing of the Bill, the scene will be set for these electronic signatures to be used to authorise a wide variety of transactions with values ranging from pennies to many millions of pounds. Users will expect the level of authentication of such signatures generally to reflect the value of a transaction. For many users, low-cost certification will be sufficient, but, as I understand it, Clause 7 as currently worded requires a level of certification which would make low-cost certificates legally inadmissible. I should be grateful if the Minister could tell be whether my understanding is correct. Depending on his reply, this may be an area I would like to return to at later stages as I am anxious to ensure that the Bill does not inadvertently restrict the development of low-cost electronic commerce services.
	E-business is fundamentally changing the telecommunications markets. The most obvious example of this is the rapid growth of Internet service providers--ISPs--offering free access and achieving huge market valuations. For example, the company Freeserve was valued at more than £2 billion within a year of its launch.This is resulting in the building of new IP or Internet protocol-based networks which will be able to carry Internet traffic more efficiently. These networks will also carry voice-over IP calls, potentially by-passing all or part of the existing switched telephone network. As if that was not enough, as the noble Lord, Lord St John, said, the mobile networks will be licensed later this year to provide and develop WAP--wireless access protocol--technology which will enable them to provide similar services to those on the move.
	Telephony and multimedia services will increasingly be bundled together by third party service providers as well as network operators. In a few years' time all this could result in people taking their multimedia services--that is to say, telephone, e-business and entertainment--from one service provider in a fiercely competitive market. This is all exciting stuff and, I think, good news for the individual customer. But there is a worrying aspect which has already been mentioned. Internet fraud is a growing problem and people need to be reassured that this is a safe medium in which to conduct business.
	By way of example, I should like to draw attention to a recent story of some professional hackers who managed to gain access to credit card records on a major service provider on the Internet in America and "stole" 15,000 records--that is to say, all the essential information they needed to use the cards fraudulently. As I understand it, those cards have not so far been used for any illegal trading but it shows the power and persistence of those with criminal minds who are always looking for a way to exploit the system.
	I believe that the Bill goes some way towards increasing confidence and sending a message that this country is serious about playing a leading role in ensuring that that happens. As legislators, we shall have a big challenge in the future to create durable laws and regulations with a light hand and not get squashed by the tremendous global flow of traffic down the Internet super-highway. With the slight caveat in my earlier remarks, I wish the Bill well on its passage through this House.

Lord Haskel: My Lords, I, too, am a member of PITCOM and of EURIM. I should like to join my noble friend Lady Dean, the noble Baroness, Lady Anelay, and the noble Earl, Lord Liverpool, in remembering Lord Chelmsford. I certainly remember him discussing these matters and drawing our attention to them five or six years ago. He was certainly well ahead of the times.
	I thank the Minister for explaining the Bill. I agree that the Government were absolutely right to take out of the Bill the demand that the key to the de-encryption of material be deposited with a third party. It would have been both unworkable and a possible violation of people's human rights. The Government were right to avoid those difficulties.
	All speakers have referred to the fact that business on the Internet is evolving fast and that we are going through a time of great change. The noble Lord, Lord St John, told us that we shall be able to access the Internet on our mobile phones and television sets. Of course, we no longer only shop on the Internet; we also access services: we do our banking, make our travel arrangements, complete our tax returns and do all kings of things. Indeed, these changes are being urged on us by means of the discounts that are offered to use the Internet. That may be one reason for the speed of change. However, that change brings its own confusion and problems.
	That is why the Government are wise to suspend Part I of the Bill. I hope that the cold storage will last for the full five years. Judging by the rate at which things are changing on the Internet, conditions will be vastly different in five years' time. Who knows what new developments await us round the corner?
	I agree with my noble friend the Minister that the value of consultation at times of rapid change is enormous. The value is that the Government are much closer to the market. That is why the T Scheme being prepared by the industry is so valuable--because it comes from the market. However, that spirit of consultation and partnership should be extended to the actual approval of the scheme. As I understand it, the Bill says that there should be statutory approval of the verification services.
	Like the noble Earl, Lord Liverpool, I believe that the Government would be very wise to allow for the actual approval scheme to be subject to formal consultation before it is approved and implemented. In that way, the spirit of partnership and consultation would be maintained which is so valuable in such a fast-moving and changing scenario.
	There is another aspect of the Bill where I believe that mistakes can be avoided. I refer to the part dealing with the way in which commerce is undertaken. At present, all of us, including the Government, see e-commerce as different from conventional commerce--"c-commerce", as it may be termed. The difference lies partly in the hype and partly in the impact and novelty of e-commerce; but it also lies partly in the fact that there are a lot more controls over transactions on the Internet. Phone lines are regulated; bandwidths are auctioned by the Government and controlled by them; whereas with conventional commerce there are no such controls. As the noble Baroness, Lady Buscombe, seemed to indicate, one of the reasons why c-commerce has flourished is the absence of controls.
	I am going to make a prediction; and I am well aware of the dangers in so doing. The prediction may be obvious, given what has been said in this debate. It is my belief that in five years' time those controls will have gone, and that we shall not have separate e-commerce and c-commerce. They will have come together, and we shall just have plain commerce.
	How will that affect the Bill, and how can mistakes be avoided? Perhaps I may give an example. People are buying ordinary things such as books and sacks of potatoes over the Internet every minute of the day. However, two weeks ago, I saw an announcement in the newspapers that someone was selling a gas-fired power station over the Internet. Over the years, c-commerce has developed hundreds of ways of verifying transactions. There is a simple and low-cost way of verifying the sale of a sack of potatoes, but it is vastly more expensive and complicated to verify the sale of a gas-fired power station.
	As the noble Earl, Lord Liverpool, pointed out, it is not clear that the Bill allows for the varying ways of verifying signatures. Clause 7 deals with that, and I am not sure whether it provides the certainty that low-cost certificates are as admissible as full certificates. A simple e-mail could verify the signature for the sale of a sack of potatoes, but it manifestly could not for the sale of a gas-fired power station. My point is that we must make sure that the Bill allows for normal flexible business practices in anticipation of e-commerce and c-commerce coming together.
	I certainly welcome the Bill for what it will do to encourage and facilitate commerce over the Internet; and for the good example set by the Government. They have promised that businesses will be able to make their VAT and PAYE returns and to file returns at Companies House over the Internet, while also being paid by the Government for the supply of goods and services. That is all very good. Surely everyone will support legislation designed to reduce paperwork.
	At the same time, however, the Government have to regulate and discipline transactions using the Internet. Achieving the balance between discipline and encouragement is difficult. It is difficult because the development of the knowledge economy happens in surprising ways. In Brazil, for instance, there is a popular portal run by a branch of the Church called "The Portal to Heaven". I have not actually tried it, but obviously someone is trying to use the knowledge economy to replace prayer and to provide virtual salvation!
	More down to earth is the fact that Cisco, with 26,000 employees, is able to operate its huge business by owning only two plants, but owning the knowledge of a further 30. That is the way things are going. Those are the complex alliances about which the noble Lord, Lord Sharman, spoke.
	These surprising new ways of doing business give rise to several problems for the Government, particularly for the Treasury. It will become much more difficult to identify transactions and the paper trail that supports them in order to determine duties and taxes due. The noble Baroness, Lady Buscombe, is shaking her head. I know that she commented on that, and I entirely agree with her.
	My noble friend Lord Evans spoke about this problem in relation to criminal activity. In order to obtain information that proper taxes and duties are being paid, the Government may well have to insist on decoding encrypted messages and signatures. I know that with the use of some clever joined-up government, the Minister has transferred much of that responsibility to the Home Secretary. However, it is something that his department will need to bear in mind when finding the balance between regulating business on the Internet and encouraging it. Indeed, the Government may well face challenges under our human rights legislation, after it comes into effect in October. Within the EU, that is less of a problem, because the Bill goes a little way towards harmonising electronic signatures in the internal market in Europe.
	There is another aspect which touches on human rights. My noble friend Lady Dean spoke about consumer values, and she has a point. One big difference between shopping on the Internet and shopping in a store is that in the latter case when one looks at the merchandise the shopkeeper knows nothing about one. Therefore, the customer is king. When one shops on the Internet, the situation is reversed. The moment one logs on to somebody's website to look at the merchandise, one announces one's presence and immediately information about one is called up. It is not very sophisticated at the moment, but it will become far more so. I envisage that in future this may be used for price discrimination. The price of goods offered may be adjusted unfairly to manipulate one's pattern of purchases.
	Encryption and secure electronic signatures can play an important part in maintaining a shopper's consumer rights and anonymity. This is best left to voluntary arrangements and consultation in regulating cryptography services. But I believe that the Government should be aware of that need when framing the legislation.
	Other noble Lords have spoken of trust. As e-commerce and c-commerce come together, the old habits of dealing with trusted suppliers of goods and services will still apply in spite of the rapid changes to which noble Lords have referred. To know with whom one is dealing is a concern of the noble Earl, Lord Erroll, who is not in his place. I believe that that is especially the case in business-to-business commerce. As far as concern consumers, the fight for their business over the Internet is on. That explains some of the huge advertising campaigns that we now see about the reliability and fairness of different content providers. I agree with the noble Lord, Lord St John of Bletso, that in the end we shall deal with the suppliers and the content providers whom we trust. As in the past, that will be our greatest protection. Plus ca change, plus c'est la meme chose.

Lord Lucas: My Lords, I start by declaring an interest. I run a small e-commerce business. My expenditure substantially exceeds income and, therefore, I should be worth millions. However, I appear to have missed a trick. I welcome this Bill. It is enormously important that we set our rules and regulations in a way that attracts e-commerce to the UK. It is by its nature such a mobile beast that it will find a home wherever it is made most welcome and where the regulations imposed on it are those which the eventual consumer finds sensible. It is the consumer who decides which particular e-business flourishes and which goes to the wall. In that context, I believe that the Bill is a useful contribution.
	I hope very much that the Minister will bring us up to date on where we are with European legislation which will have an impact in this area. In particular, I should like to end up in a situation where if I, as a UK businessman, decide that my contracts with third parties all over the world shall be governed by English law that will be respected by the EU when it comes to judge whether or not I have broken those contracts. At the moment, it appears that the EU seeks to make me subject to the legislation of 15 different countries. Perhaps in some senses the Financial Services and Markets Bill takes the same attitude; namely, it seeks to impose UK legislation on a lot of foreign transactions. I should be grateful to hear a statement of principle from the Government so that we have an idea of where we may be going.
	I like Part I of the Bill. Section 5 of the report e-commerce@its.best.uk is thoroughly useful and I commend it to noble Lords. It sets out clearly the right relationship between government and the market. One wishes that other departments of the Government had read it and adhered to it. The report sets out four principles. First, the Government should provide a light touch regulatory and tax framework. Part I fits into that pattern extremely well. The idea of having reserve powers and allowing the market to develop with that in mind seems an excellent way of ensuring that a fairly unprepared, diverse and, to some extent, reluctant business community does what it should do. I hope and expect that that will succeed.
	Other government departments do not take that attitude. HM Customs and Excise is particularly awkward to deal with. I have a particular problems in deciding where an overseas customer is resident. I trade in knowledge, not physical goods. HM Customs and Excise will not give me any help in identifying what evidence it requires to establish that one of my customers is outside the EU. I do not believe that that is the right attitude. I understand the problems of HM Customs and Excise. However, I believe that it should be proactive in trying to help businessmen to do business internationally over the web rather than lay sticks over the elephant trap in the hope that they will break under the weight of being trodden on.
	The second principle set out by the report is that the Government should act as a catalyst for change. I believe that Part I of the Bill satisfies that entirely. Many of the Government's activities in this area are sterling examples of the Government at their best in dealing with these aspects. The third principle is that the Government should ensure that e-commerce developments contribute to the creation of a strong and fair society. As to that, there is a great deal to do. This fast developing market is one which naturally creates monopolies. Businesses band together just out of fear of the pace at which the market changes. They try to hold on to bits of the market to look after their own interests against the interests of the consumer.
	The prime sinner is, as ever, British Telecom. For years it delayed pricing ISDN properly. The service was so expensive that it was out of the reach of people. BT brought it down to a proper commercial price only when the service had scarcely any advantage over ordinary modems. Not surprisingly, it has not been able to do much with it. Now BT is entrusted with the introduction of a crucial piece of new technology: ASDL (asynchronous subscriber digital lines). I do not know whether many noble Lords have seen the speed of Internet access that is available through the new Library terminals. Pages flick across the screen so fast that one scarcely sees a change. When one tries to dial in over the old network one must wait 15 or 20 seconds before the next page chugs along. ASDL is about 20 times faster than the ordinary dial-up access and will make an enormous difference to how the web is used.
	ASDL is the equivalent of mobile telephony for the web in terms of usefulness. People will be prepared to pay the kind of price that the French are being asked to pay for ASDL access, which is about £250 a year. BT proposes a figure of about £1,000 a year. That is not right. This is a crucial development, and if the UK is to remain the centre of innovation in e-commerce we must get it right.
	Other aspects of big business practice have been mentioned; for example, the problems of credit card acceptance in relation to new small businesses. I refer to the waiting period that is traditionally required before one can use credit cards and, therefore, gain access to online payment systems. We must bear in mind the effects of social exclusion which will result if we do not open up the web to all kinds of businesses and people in this country. I believe that we can look back with pride at the penny post as an example of the kinds of things at which the Government should aim. Clearly, that was something which cost the residents of London who could have had it a great deal cheaper. Nonetheless, it was immensely beneficial to the country as a whole.
	The Government need to pay attention to the infrastructure, the underlying rules and regulations of the network. In Committee we shall be able to discuss the Government's attitude to Spam. Laws in California seem to have made a reasonable start in dealing with that plague. I should like to discuss whether the Government are prepared to consider going down that route in the UK.
	We also need to cover quality assurance. There was mention today of Trust UK, an organisation for which I have little time. It is an amalgamation of trade associations. To combine an amorphous group of trade associations, with little budget and insignificant government backing, and produce something in which people will believe I find a ridiculous idea. Trade associations are worse than the BMA in general. For ordinary customers to rely on a group of them is not the right way forward.
	There is hope--the action may be too slow and too late--that the accountants may produce some provision. They are supposed to be good at auditing and assuring the public that something is as it is supposed to be. They can adjust to providing services to small and large businesses. They should have leapt to provide such a service; they have not done so. I am part of that profession and I am sorry; I hope that the situation will be remedied soon.
	The fourth criterion that e-commerce@its.best.uk asks of the Government is that they act as an exemplar. In many ways that is right. I was disappointed by the reaction of the Government Front Bench to my recent questions on improving Hansard. The Government do not seem to be looking positively at what they can do with new technology to make all our lives easier or considering methods which are not possible with a paper-based system but are possible in electronic terms.
	I turn to Part II of the Bill. Over several years we shall be faced with a complex series of regulations some of which raise difficult questions. I look forward to considering in Committee whether they can be settled by negative procedure. In the passage of those regulations we shall find it difficult to know the circumstances in which an electronic signature is valid and when it is not. I wish to pursue with the Government the concept of an individual or a business stating that he or it will accept an electronic signature in all circumstances when legislation or other custom would require a written signature, thereby bypassing the slow, difficult-to-discern passage of legislation. For instance, Westminster City Council might say, "We will accept all notices required to be given to us in electronic form with an electronic signature. We do not have to wait for the Government to pass all the necessary legislation to make that a consumer right." In other words, until the Government pass such legislation, I would not have the right to serve those notices by e-mail, but an individual council might make it possible for me to do so. It would wish to be certain that everything was made valid by electronic signature.
	I wish also to pursue proof of delivery. I have not seen the issue discussed anywhere. It is a difficult concept as regards e-mail. I do not know how the Government imagine that that concept will be tackled. I am concerned about the "believability" of signatures. I should like to pursue in some detail in Committee the precise way in which we are to understand that an electronic signature represents a person. If I am buying a house from a person, I know through a chain of people that that person exists. I have talked to my solicitor who has talked to another solicitor. Solicitors know and trust each; and there is a client at the other end. Even if I have never met the person there is reason for me to believe that his signature on a piece of paper has reality. How do I achieve a similar state of belief with an electronic signature? I may not be able to make the same connection through to the person making the signature.
	The only matter I wish to pursue in Part III relates to social exclusion and ASDL. If we do not do something about telecommunications licences there is a strong chance that people in the countryside more than three miles from a main exchange will be excluded from the ASDL network. It is not technically possible to run an ASDL line more than three miles from an exchange. However, the mobile telecommunications companies have masts all over the countryside. Few homes are not within three miles of a telecommunications mast. As part of the permission by the community to have those masts in the area, there should be some obligation on the owners of the masts to provide ASDL connections from those masts to local houses. I do not seek to put that provision in the Bill, but I should like to discuss the issue. I can see no other way in which ASDL will be brought effectively into the countryside.
	I welcome the Bill. I was worried when the Minister said that Bill Gates liked it. I use a lot of his software every day, and bug-ridden, ill-documented, unreliable stuff it is. I hope that his was a general welcome rather than a comment on the quality of the clauses. I look forward to hearing the Minister defend them in Committee.

Lord Razzall: My Lords, I join with every noble Lord who has spoken in the debate in welcoming the Bill in general terms. I like the idea at the beginning of the millennium of passing a Bill providing a framework for the regulation of what will undoubtedly be the medium of the new millennium.
	I welcome the change of heart on a number of points by the Government and the Tory Opposition. On the Tory side, I welcome the fact that it has changed its position radically from that of another place. On Second Reading, it moved that another place,
	"declines to give a Second Reading to the ... Bill because it introduces a completely unnecessary element of regulation in the supervision of electronic commerce".
	I am delighted that the Tory Front Bench has moved away significantly from that position and is joining in the general unanimity with which the principle of the Bill is now accepted.
	I am pleased that the Government have moved away from their position on a number of issues relating to the Bill. From these Benches, we are delighted that they have chosen not to put in what was originally Part III of the Bill. It may be brought back in more appropriate form later in the Session. But that has not stopped one or two noble Lords from making the speech they would have made if Part III had been included in the Bill in its original form.
	I am delighted that the Government have acceded to the recommendations of the Delegated Powers and Deregulation Committee. The Minister indicated that he will bring forward amendments. I share the view of the Internet Services Providers Association, whose chairman said that,
	"Government has heard the voice of the Internet industry in the United Kingdom and chosen to explicitly reject the use of key escrow as a legal requirement".
	I am sure the House will be pleased that the Government have recognised the pressure from the Internet industry on that issue.
	I share the concerns of the noble Lord, Lord Lucas, regarding the wide endorsement of the Bill by Microsoft. When I read, as did a number of noble Lords, that Microsoft entirely welcomed the Bill and regarded it as a model for future legislation throughout Europe, I began to wonder whether the support we were giving the Bill should be rethought marginally. No doubt we can contemplate that when we discuss the detail in Committee.
	But, of course, after taking out all the things that the Government have taken out--the Minister described this as "a light and regulatory framework"--I suppose we could also say that the Bill is now a rather short and meagre affair. There is an element of slight cynicism in wondering whether this Bill is now put forward, having had everything taken out of it, because the Government had announced in the Queen's Speech the year before last that they would put forward this Bill and therefore now feel that they must put it forward; but that is perhaps unnecessarily cynical. Nevertheless, although we generally support it, we will from these Benches, and no doubt from the Opposition Benches of the Conservative Party, wish to deal with specific matters as it passes through Committee.
	There are a number of points on which we wish to probe the Government. With regard to the first part relating to the creation of a register of approved providers of cryptography support services, we will probably not wish to re-visit the argument that was advanced in another place as to whether it is better to wait to see if these powers are needed before legislating. The other place has decided that that is the best way to proceed. The Minister indicated that he hoped that the powers would not have to be exercised, and I do not believe that we need to re-run the argument as to whether in that case it would be better not to have them at all. However, there are one or two points in that section on which we shall wish to probe the Government.
	First, with regard to Clause 2(3)(d), we wish to go into some detail about what is meant by,
	"a fit and proper person to be approved",
	which raises a number of issues that will be worthy of discussion. Secondly, in relation to that section, we wish to probe the question of what information can be disclosed in connection with the investigation and prosecution of crime. There clearly is an issue here as to whether similar protections that are applicable under the Data Protection Act ought also to be applicable to this section. These are matters with which we can deal in Committee.
	The second part of the Bill allows electronic signatures and messages to be treated in much the same way as paper ones. There are some points relating to this matter with which we wish to deal in Committee. First, there is a view that the Government have not quite gone far enough in this Bill to ensure that electronic signatures will achieve parity with hand-written signatures. The Irish Electronic Commerce Act, the Uniform Electronic Transactions Act in the USA and the Uniform Electronic Commerce Act in Canada go somewhat further than the Government are now contemplating and we shall wish to probe that area in Committee.
	Leaving aside detailed comments on the Bill, Patricia Hewitt, the e-commerce Minister as she is known, has indicated that the purpose of this Bill is to encourage growth in electronic commerce. The Minister also indicated this evening that that is the purpose of the Bill. If we believe, with my noble friend Lord Sharman, that the creation of the Internet is the most significant commerce development of our lifetime, this Second Reading provides an opportunity for us to comment on what we feel is missing from the government rhetoric, if we are talking about a Bill which is designed to enable electronic commerce to thrive. After all, most of the provisions of the Bill are prescriptive rather than enabling, and most of them go to create a form of regulation and restriction rather than encouraging electronic commerce.
	There are a number of questions--I can certainly list three--that I would like to put to the Minister in relation to what the Government are proposing to do in order to enhance electronic commerce in this country. First, it is all very well to say that electronic commerce and the use of the Internet will be enhanced by making a large number of free computers available to schoolchildren and to institutes of education, but that will not be an adequate response to the modern age if adequate training provisions are not put in place. We could have free or subsidised training in local colleges, in schools, in community centres, to ensure that the less privileged in our society have an opportunity to access this key medium.
	Secondly, the point raised by the noble Lord, Lord Lucas, is fundamental to the development of electronic commerce in this country. We have seen in recent days a large destruction of the BT share price as a result of the Chancellor of the Exchequer's remarks. However, as was indicated by the noble Lord, Lord Lucas, it is not only access to the Internet by ordinary people in their homes and the price of that access that are relevant. What in many cases is more relevant is the whole issue of the cost of broad-band access, the cost that is relevant to enabling particularly small and medium-sized businesses to sign up to the Internet. They will not be able to access the opportunities that are available to them unless the cost of that access is reduced. In terms of determining government policy, this is one of the most significant things that the Government can do to further the growth of electronic commerce.
	Thirdly, there are a number of areas in which the Government can take a lead by making more government products available online: TV licences, driving licences and tax returns could all be made available online electronically to the public. That is an example which could be set by the Government to demonstrate their commitment to the development of the Internet.
	In conclusion, we on these Benches welcome the Bill and we shall probe the detail in Committee. However, we feel that it is marginally long on rhetoric and slightly short on practical help to the industry.

The Earl of Northesk: My Lords, we have had a most illuminating debate, and I congratulate all noble Lords who have taken part. I would particularly like to associate these Benches with the very kind and generous tribute paid by the noble Baroness, Lady Dean, to my noble friend Lord Chelmsford. This would indeed have been grist to his mill, had he still been with us. Like all noble Lords who have spoken, I congratulate the Government on introducing this Bill, though I should say that our welcome for it here owes a great deal to the fact that the Government were so receptive to our suggestions in another place.
	We all have our own preferences for defining the pervasive and meteoric rise of IT. I need not dwell on that. What surprises me, however, is the degree of hyperbole with which IT is so often wrapped. While not wishing to attract the slur of being labelled as a "dark force of conservatism", I maintain that our perceptions about IT need to be tempered with some caution. We can be too tempted into viewing its benefits through rose-coloured spectacles. While it has a huge potential as a force for good, it also has a capacity to create new and unforeseen problems. For example, there was a news report over the weekend about the so-called "dot.com down-and-outs". As the Select Committee of another place put it:
	"Public policy must not be transfixed by technology, but it must be informed by it and might be transformed by it".
	In other words, we need to bear in mind that for every boon that IT may bring, it may also create an associated matrix of problems.
	With that introduction, I move to consider the Bill itself. I say at once that we on these Benches support the principle which underpins the Government's thinking. The litmus test by which this Bill should be judged is the extent to which it will facilitate the use of electronic communications and electronic data storage. Will it encourage or impede the development of e-commerce?
	As the Minister explained, Part I provides for a statutory and voluntary register of approved providers of cryptography support services, the Government's "co-regulatory" approach. The mood music of the Government--and, incidentally, of the noble Lord, Lord Haskel--is that it is their abiding hope and expectation that this scheme will never be implemented. The Minister near enough confirmed that today. Here, the scheme being promoted by the Alliance for Electronic Business is well-advanced. Again, the Minister confirmed that the Government are satisfied with its progress so far.
	More than that, and as other noble Lords have observed, Clause 15(3) has been expressly framed to repeal Part I if no order to give effect to its provisions has been tabled after five years. Fair enough, but this sunset clause begs the question as to why we are being asked to legislate for something that the Government, on their own admission, have neither a desire nor an intention currently to implement. To this extent, it could be interpreted that Part I is little more than legislation for legislation's sake, regulation for regulation's sake.
	The Government have argued that they are simply following the recommendation of the Select Committee of another place. Equally, we on these Benches accept and welcome the fact that the part is framed to be as technology neutral as possible. That may be so, but, as all noble Lords have said, technological advance in IT is explosive. As my noble friend Lord Liverpool made so plain, there can be no guarantee that the current drafting will remain in step with that advance.
	Consider this:
	"A Bill takes at least a year to get through Parliament. Given the pace of the Internet, it's likely to be out of date even before it comes into effect".
	Those are not my words; they are the Prime Minister's.
	Of course governments need flexibility. Order-making powers are the ideal mechanism for its delivery, particularly with respect to technical aspects of public policy. But, like the Delegated Powers and Deregulation Committee, we feel that this is too important, too significant, an issue to be left to the whim of an individual Secretary of State effectively free from proper parliamentary scrutiny. While grateful for the Minister's concession, we remain concerned about the possibility of a further "stealth" e-tax being levied on the industry by means of any fees required from those signing up to a voluntary/statutory scheme. Hard on the heels of the IR35 provision, which may result in the loss of £1.9 billion-worth of UK IT consultancy fees, at a cost to the Exchequer of £760 million, this would be antipathetic to the advancement of UK e-commerce.
	The Minister makes great play of the Government's "genuine partnership" with industry on this Bill. Of course consultation is essential, but this is not all one-way traffic. I have already mentioned IR35. Moreover, no less a body than InterForum, member companies of which have annual revenues of some £78 billion, have commented that:
	"For the Government to reserve powers to introduce an alternative scheme at any time undermines confidence and injects an element of risk into our business planning--just at the moment when we should be doing everything possible to increase our investment. Therefore, we would recommend that you remove Part I and take forward a simplified Bill".
	We on these Benches are sympathetic to that view.
	I turn now to what is the kernel of the Bill; Part II and the admissibility of electronic signatures in law. We accept without reservation that this is both sensible and desirable. There is consensus about that on all sides of the House. It will build confidence and trust among both consumers and practitioners of e-commerce. But, as my noble friends Lady Buscombe and Lady Anelay have pointed out, it will do so only if we get the legislation right.
	I was pleasantly surprised and pleased to observe that, perhaps unusually for Members of another place, their scrutiny of Part II has been characterised by sweet reason. Of course, even in this transitional House, we are much more accustomed to such an approach. On that basis, we will spend many happy hours in Committee debating some of the finer technical points at issue here.
	At this stage, I simply flag up our more general anxiety about the order-making powers in Part II. We acknowledge the rationale for them and the simple fact that the Government should be seen to be giving a lead in this matter. The difficulty, as articulated by Amazon.com., is that there is no imposition of either urgency or co-ordination upon individual Ministers: each can proceed in his own sweet time and in whatever way he deems appropriate.
	Ironically, this is a particular concern of none other than the Alliance for Electronic Business, which has set the end of this year as a deadline for the tabling of the relevant statutory instruments if the growth of e-commerce in the UK is not to be compromised. Of course the Minister for Small Business and E-Commerce published the first Section 8 order in draft only last week. We welcome that and the Minister's commitment to the issue. We simply ask whether the Government are adequately seized of the possibility that some of her ministerial colleagues--perhaps of a more monolithic or (dare I say?) Luddite bent--will naturally follow the sleekness of her example.
	In some respects, the Bill is as significant for what is absent from it as for the scraps and odd pieces of red meat that it contains. Key-escrow is a case in point. But in this we should be under no illusions. The measure before us today is, as it were, a first skirmish in an ongoing battle against the demons of over-exuberant regulatory burden. Other areas of the legislative mill--notably Finance Bills and the Financial Services and Markets Bill--are making their own, potentially anomalous, provisions for IT.
	Echoing some of the concerns of my noble friend Lord Lucas, I note that a common position, on which the Government will no doubt seek to legislate in due course, was arrived at on the EU Directive on Certain Legal Aspects of Electronic Commerce on 7th December last. I note, too, the DTI announcement on 3rd February of the White Paper for proposals to reform telecommunications and broadcasting regulations to take account of the convergence in the communications industries as a prelude to future legislation. Other EU directives are in the pipeline. A veritable log-jam of e-commerce related measures is building up in the wings.
	We also recognise that the Government are pursuing a number of initiatives away from the spotlight, if I can put it that way, of primary legislation; such as the TrustUK kitemark, referred to by the noble Baroness, Lady Dean, and my noble friend Lord Lucas, and the fact that the e-envoy has finally got his feet under the desk in the Cabinet Office. These form part of the deluge of recommendations from the PIU's report, e-commerce@itsbest, which I hope the Minister can confirm are on track. In this context, perhaps the Minister can also confirm the assessment of the Better Regulation Task Force that the 60 different initiatives that are being worked on for IT regulation could lead to 4,000 items of legislation.
	Whether this flurry of activity will be beneficial in the context of e-commerce, only time will tell. Overall, we doubt it. But, as my noble friend Lady Buscombe pointed out, we on these Benches are certain of one thing; e-commerce in the UK will prosper only if government properly understand the global--not UK-wide, not European, but global--context in which it operates. That more than anything else is the key to the prosperity of UK e-commerce. I noted that last year in Cambridge the Prime Minister seemed to demand that business should "think European" in the context of IT. That is worrying because it is far too narrow a focus.
	The Government's assertions for their public policy approach to IT are bold. They claim that the Bill:
	"forms a key part of the Government's strategy for making the UK the best place in the world to do electronic business by starting the process of modernising the law and creating a climate in which electronic business can be conducted with confidence".
	All good and well. We hope that they are right. Indeed, Part II of this Bill is a legitimate part of that process. But we believe that Part I, and the Government's wider IT agenda, contain alarming signals about their commitment to "light touch" regulation. Bluntly, that does, and should, worry us. In the meantime, we welcome its small step/giant leap character and look forward to its Committee stage in due course.

Lord Sainsbury of Turville: My Lords, this has been a very constructive and interesting debate. There is obviously a great deal of expertise among noble Lords here tonight. I look forward very much to detailed discussions in Committee when I am sure that I shall benefit further from the knowledge and experience of others.
	I am particularly delighted that the noble Baroness, Lady Dean, and the noble Lord, Lord Evans, emphasised the opportunities involved because I believe that that is what we should keep our eyes on as we go forward with this Bill. I say to the noble Lord, Lord Razzall, that I believe it was slightly uncharitable to say, on the one hand, that he applauds the "light touch" of regulation, and, on the other, to say that it is a meagre Bill. One can have it one way or the other, but I do not believe that one should try to have it both ways. I believe that we can all agree tonight that the extraordinary achievements of the IT industry are based on market enterprise at its very best. I believe that that is common ground.
	I shall try to respond in a moment to some of the detailed points raised during the debate, but first I should like to elaborate on one or two of the remarks which I made in opening it. This Bill, appropriately introduced in the parliamentary Session spanning the millennium, is central to the modernising theme of the Government's legislative programme. Modernising the law to ensure that our economy prospers in the information age is a vitally important task to which we are committed. We are equally committed to modernising government itself. I can assure the noble Lord, Lord Lucas, that we shall take a leadership role in this field. In short, we are determined to create both a legal and a business environment that makes the UK the best place in the world for electronic business.
	The overall aim of the Bill is, as I said, to provide a market framework within which electronic commerce can thrive. It will build trust in the authenticity, confidentiality and security of online transactions. Such trust is vital if businesses and the public are to have confidence to use the new exciting technologies entering the marketplace. But government alone cannot build that trust. The task is as much for business, which is why we are so keen on co-regulation. But we need to legislate to create the right legal framework. I totally agree with the noble Lord, Lord St John of Bletso, that although we need to look at the opportunities, we must also stress very clearly that there are major security issues which need to be tackled.
	If individuals and businesses do not trust electronic communications, they will be reluctant to order goods and services online and to send their credit card details over the Internet. That is why electronic signature services and confidentiality services are so important to the future of electronic commerce. But how do we decide which service providers we can trust and those which perhaps have failed to invest in the expertise and technology which such services demand? That is where a "kitemark" scheme is so important.
	I am delighted that the Opposition have acknowledged the extent to which technology has moved in the past few years and that that is a good reason for them to modify the position that they held when this Bill was conceived, which was to have an essentially mandatory approach to the registration of cryptographic services and a mandatory placement of the keys. The Opposition now agree with us that a voluntary approach is a better one.
	We have discussed in some detail the merits of self-regulation over a statutory approvals scheme. The Government's preference is for self-regulation, which is well known, as is our involvement in the development of the Alliance for Electronic Business's T Scheme. We are confident that this scheme can deliver. But we should be foolish to assume that its success is guaranteed. The market is immature and we cannot predict the future, much as we might wish to do so. It is therefore only right that we keep the possibility of introducing a statutory scheme in reserve. We are confident that the T Scheme will succeed, but I do not agree with the noble Earl, Lord Northesk, that it would be right to give up that power.
	The Government recognise the degree of parliamentary interest, both in this House and in another place, in the procedure which would apply if this part of the Bill were brought into force. We have listened carefully to the arguments and have carefully considered the recommendations of the Delegated Powers and Deregulation Committee. As I have already outlined, we shall bring forward amendments in Committee to make the commencement of this part of the Bill subject to the affirmative procedure. Both Houses will have the opportunity to debate the issues and to vote on the decision.
	I say to the noble Earl, Lord Liverpool, that the Bill is technology neutral. In that sense, the extent to which technology develops in this period, before any sunset clause would come into effect, is not relevant to this particular point. Before any regulations were brought in, there would be consultation.
	Part II of the Bill has been described as the "kernel". I would not argue with that description. It will clear up uncertainty about the admissibility of electronic signatures and thereby build confidence in them. It will also give Ministers the tool to modernise the statute book to enable information to be communicated or stored electronically. In doing so, it will pave the way for a revolution in the way in which government works and will modernise our relationship with the citizen. It will offer electronic options for those who want them.
	I now comment on some of the particular points raised by noble Lords. I agree very much with the noble Lord, Lord Sharman, about access. That is absolutely fundamental to the process so that we do not have people who are disadvantaged in this new world. I hope that he will take particular interest in this Bill and the issues on crime which might arise, knowing of his chairmanship of the Foresight Crime Prevention Panel.
	The noble Earl, Lord Erroll, raised the question of whether we should look at electronic signatures across the board. We looked at that and resolved that it would cause more uncertainty and confusion than proceeding the way we are, which is with primary legislation to make that possible, but then looking in turn at each of the areas in depth before bringing forward regulations.
	A question was also raised about the definition of an electronic signature. That includes the concept of authenticity, which in turn is defined in Clause 14(2). One aspect of authenticity is whether the communication was intended to have legal effect. The courts will be able to consider whether a person who signed something electronically intended it to have legal effect. The signature will be evidence of that, although there may be other evidence which needs to be considered.
	The noble Baroness, Lady Anelay, also raised a question on electronic signatures. Clause 7 is drawn widely to allow any kind of electronic signature to be admissible as evidence in court. But that does not mean that on every occasion the signature will be accepted as genuine. It is possible to get hold of someone else's electronic signature if the owner is careless, just as it is possible to forge a handwritten signature. So it will be for the courts to examine the particular case and then to decide what actually happened, on all the evidence available. I believe that that strikes the right balance.
	I am glad to be able to reassure the noble Baroness, Lady Buscombe, that the definition of an electronic signature in Clause 7(2) encompasses both digital and electronic signatures. That is important to retain the overall technology neutrality of the Bill. In that context, as in others, there is no intention of second-guessing the development of the market. I should explain to the House that neither the definition contained in the Bill nor that in the Electronic Signatures Directive is restricted to personal signatures. That would restrict the scope of these measures, as not all electronic signatures are generated by individuals.
	My noble friend Lady Dean raised a question about the role of notaries and the banks through IDENTRUS in the Alliance of Electronic Business's T Scheme. I understand that both the notaries and the banks are playing important roles in the alliance's work and they will be encouraged to continue to do so. I am sure that notaries can bring particular expertise to the world of e-commerce. However, I can assure the House that under the Bill there will be no new requirements for signatures to be notarised. I am also confident that the banks will be able to play an important role in both the T Scheme and IDENTRUS, the latter being essentially for bank-to-business electronic commerce.
	The noble Lord, Lord Blackwell, asked about liabilities. Clearly, this is an important issue. The Bill does not make special provision for the liability of cryptographic service providers. Problems can be dealt with through the existing English law of tort and contract. A person who uses an electronic signature will normally have a contractual relationship with the service provider. If something goes wrong, he will be able to look at the terms of the contract. In some cases, the Unfair Contract Terms Act 1977 and the regulations covering unfair terms in consumer contracts limit the way in which liability for breach of contract can be excluded through exclusion clauses. Of course, the Government will not be authenticating signatures in this process, so there will be no liability for erroneous signatures.
	The noble Lord, Lord Blackwell, raised two further questions. I can assure him that the Government will deliver leadership on e-commerce. As regards investigatory powers, nothing in this Bill relates to that matter. It is covered in the Regulation of Investigatory Powers Bill.
	The noble Earl, Lord Liverpool, asked about low-cost signatures. I do not believe that this Bill affects their recognition in any way. While it does not exclude low-cost signatures, to the extent that people provide services which are of lower quality, that fact should be taken into account by those who use such services.
	Perhaps I may assure the noble Lord, Lord Lucas, that the Bill is in line with the EU Electronic Signatures Directive. As regards the question of legislation and jurisdiction across national boundaries, it would always be nice in such areas to say that one's own legislation and jurisdiction is predominant. However, when one is selling to people in other countries, they may have a different view. The idea behind looking at this matter on a European basis is to attempt to secure unanimity on that view. Nevertheless, on the balance of rights between the producer and the consumer, this is an issue where the consumer will always view it in a different way from the producer. Obviously the producer would always wish for the jurisdiction of his country to apply, while the consumer, when he buys from another country, would prefer to use the jurisdiction of his own country. The right balance needs to be struck to give the consumer confidence, but also to ensure that costs are not loaded unnecessarily onto the producer. That is the core of this difficult issue which we are trying to resolve.
	I should also say that Clause 8 only refers to situations where existing legislation refers to writing or signatures. It is then for individuals to make use of electronic signatures or not as they wish. If one takes the approach--and I think that this is the right one--of saying that electronic signatures are an option, then one needs to accept the situation that there will be some cases where individuals make use of them and some cases where they do not. I believe that that diversity is preferable to trying to impose one overall, standard policy.
	As I said earlier, this has been an extremely interesting debate. I hope that I have covered the main issues that have been raised by all noble Lords who have contributed. If I have not done so, there will be many opportunities to look at these issues again in more detail as the Bill progresses through its stages.
	The information age has already begun to touch on all our lives. It has the potential to transform them. We are all agreed on the need to embrace these changes. If we do not, we will find that we have been left behind both commercially and in other ways. The information revolution does not only give us the opportunity to improve the productivity of our businesses or the efficiency of government but to improve society as well: to deliver services to the public more efficiently; to improve people's access to information; to improve the education of our children and our access to medical care. It is not change for the sake of it but change for the greater good.
	This Bill is a key component of our strategy for making the most of the opportunities which new technologies have offered us. It is a light-touch Bill which will help to make this country the best place in the world for electronic trading. I commend it to the House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at four minutes before nine o'clock.